Parenthood and Risk Preferences

12 Pages Posted: 16 Jun 2015

See all articles by Katja Görlitz

Katja Görlitz

Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Marcus Tamm

RWI

Date Written: April 15, 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

Görlitz, Katja and Tamm, Marcus, Parenthood and Risk Preferences (April 15, 2015). Available at SSRN: https://ssrn.com/abstract=2618442 or http://dx.doi.org/10.2139/ssrn.2618442

Katja Görlitz

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

Marcus Tamm (Contact Author)

RWI ( email )

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

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