Risk Attitudes Across the Life Course

42 Pages Posted: 12 Feb 2016

See all articles by Thomas J. Dohmen

Thomas J. Dohmen

Institute for the Study of Labor (IZA); Maastricht University - Business Investment Research Center (BIRC)

Armin Falk

briq - Institute on Behavior & Inequality

Bart Golsteyn

Maastricht University - Research Centre for Education and the Labour Market (ROA); IZA Institute of Labor Economics; Stockholm University - Swedish Institute for Social Research (SOFI)

David Huffman

IZA Institute of Labor Economics; Swarthmore College

Uwe Sunde

Ludwig Maximilian University of Munich (LMU)

Multiple version iconThere are 2 versions of this paper

Date Written: November 19, 2015

Abstract

This paper investigates how risk attitudes change over the life course. We study the age trajectory of risk attitudes all the way from early adulthood until old age, in large representative panel data sets from the Netherlands and Germany. Age patterns are generally difficult to identify separately from cohort or calendar period effects. We achieve identification by replacing calendar period indicators with controls for the specific underlying factors that may change risk attitudes across periods. The main result is that willingness to take risks decreases over the life course, linearly until approximately age 65 after which the slope becomes flatter.

Keywords: risk attitudes, age, period, cohort

JEL Classification: D03, D8, J1

Suggested Citation

Dohmen, Thomas and Falk, Armin and Golsteyn, Bart and Huffman, David and Sunde, Uwe, Risk Attitudes Across the Life Course (November 19, 2015). Netspar Discussion Paper No. 11/2015-057. Available at SSRN: https://ssrn.com/abstract=2731612 or http://dx.doi.org/10.2139/ssrn.2731612

Thomas Dohmen (Contact Author)

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Maastricht University - Business Investment Research Center (BIRC) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31-43-388 3832 (Phone)
+31-43-388 4856 (Fax)

Armin Falk

briq - Institute on Behavior & Inequality

Schaumburg-Lippe-Stra├če 5-9
Bonn, 53113
Germany

HOME PAGE: http://www.briq-institute.org/

Bart Golsteyn

Maastricht University - Research Centre for Education and the Labour Market (ROA) ( email )

P.O. Box 616
Maastricht, MD6200
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Stockholm University - Swedish Institute for Social Research (SOFI) ( email )

Kyrkgatan 43B
SE-106 91 Stockholm
Sweden

David Huffman

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Swarthmore College

500 College Ave
Swarthmore, PA 19081
United States

Uwe Sunde

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, Bavaria 80539
Germany

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