Gender Gap in Personal Bankruptcy Risks: Empirical Evidence from Singapore

55 Pages Posted: 22 Oct 2013 Last revised: 7 Oct 2016

Sumit Agarwal

National University of Singapore

Jia He

Nankai University

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate

Jian Zhang

Hong Kong Baptist University (HKBU) - Department of Finance and Decision Sciences

Date Written: June 10, 2016

Abstract

Using a unique dataset that merges bankruptcy and motor events with personal data in Singapore, this study finds significant evidence of gender gap in personal bankruptcy risk. We show that the women’ odds in bankruptcy events is 28% of the men’s odds controlling for demographic, housing types and spatial fixed effects. The gender gap is not race-neutral. We find that the gender effect is stronger in Chinese’s bankruptcy events, but weaker in Malay and Indian bankruptcy events, relative to the bankruptcy events in the control group (“other” race). The gender gap is also observed in multiple bankruptcy events and bankruptcy claim amounts. We use motor accident events as an instrument for risk-taking, and find similar evidence of the gender gap in bankruptcy events. Bankruptcy risks of debtors with past motor accident records are significantly higher than those without past motor accident records. The gender gap in bankruptcy risk has important implications for credit modelling and risk pricing in the finance and economic literature.

Keywords: Personal Bankruptcy, Gender, Risk Aversion, Household Finance

JEL Classification: A12, G02, J16

Suggested Citation

Agarwal, Sumit and He, Jia and Sing, Tien Foo and Zhang, Jian, Gender Gap in Personal Bankruptcy Risks: Empirical Evidence from Singapore (June 10, 2016). Review of Finance, Forthcoming; 27th Australasian Finance and Banking Conference 2014 Paper. Available at SSRN: https://ssrn.com/abstract=2340371 or http://dx.doi.org/10.2139/ssrn.2340371

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Jia He

Nankai University ( email )

94 Weijin Road
Tianjin, 300071
China

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate ( email )

4 Architecture Drive
Singapore 117566
Singapore

Jian Zhang (Contact Author)

Hong Kong Baptist University (HKBU) - Department of Finance and Decision Sciences ( email )

Hong Kong

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