This paper develops an empirically estimable model of occupational choice under uncertainty, given an individual's risk preferences and human capital and given the moments of the distribution of earnings within various alternative occupations. The model is estimated using data on entry-level occupational choices of high school graduates in Maryland school districts from 1951 through 1969. Our results confirm that increasing the mean and reducing the second moment of the earnings distribution significantly increases the log odds of selecting the occupation. In addition, occupational choice is affected by school quality and home inputs.
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Orazem et al. (1986) studied this question.
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