ARE WOMEN MORE RISK AVERSE?

TLDR

Using U.S. sample data, we examine household holdings of risky assets to determine whether there are gender differences in financial risk taking. Single women show greater financial risk aversion than single men, with a smaller increase in risky asset holdings as wealth rises, and these gender differences are moderated by age, race, and number of children, potentially explaining women's lower wealth levels.

Abstract

We find that single women exhibit relatively more risk aversion in financial decision making than single men. Using U.S. sample data, we examine household holdings of risky assets to determine whether there are gender differences in financial risk taking. As wealth increases, the proportion of wealth held as risky assets is estimated to increase by a smaller amount for single women than for single men. Gender differences in financial risk taking are also influenced by age, race, and number of children. Greater financial risk aversion may provide an explanation for women's lower levels of wealth compared with men's. ( JEL J16, D81, G11)