Parenthood and Risk Preferences

10 Pages Posted: 6 Apr 2015

Abstract

This study analyzes how risk attitudes change when individuals become parents using longitudinal data for a large and representative sample of individuals. The results show that men and women experience a considerable increase in risk aversion which already starts as early as two years before becoming a parent, is largest shortly after giving birth and disappears when the child becomes older. These findings show that parenthood leads to considerable changes in individual risk attitudes over time. Thus, analyses using risk preferences as the explanatory variable for economic outcomes should be careful in interpreting the findings as causal effects.

Keywords: risk aversion, risk preferences, preference stability, parenthood, children, gender differences

JEL Classification: D1, D81, J13, J16

Suggested Citation

Goerlitz, Katja and Tamm, Marcus, Parenthood and Risk Preferences. IZA Discussion Paper No. 8947, Available at SSRN: https://ssrn.com/abstract=2589809 or http://dx.doi.org/10.2139/ssrn.2589809

Katja Goerlitz (Contact Author)

FU Berlin ( email )

Boltzmannstrasse 20
D-14195 Berlin, 14195
Germany

Marcus Tamm

RWI ( email )

Invalidenstr. 112
10115 Berlin
Germany
+49 30 202159818 (Phone)
+49 30 202159819 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
95
Abstract Views
769
Rank
489,152
PlumX Metrics