Gender Differences in Personal Income and Financial Risk Tolerance: How Much of a Connection?

Authors

  • Michael J. Roszkowski,

    Corresponding author
    1. Office of Institutional Research, La Salle University
      Office of Institutional Research, La Salle University, 1900 West Olney Avenue, Philadelphia, PA 19141-1199 (e-mail: roszkows@lasalle.edu).
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  • John E. Grable

    1. School of Family Studies & Human Services, College of Human Ecology, Kansas State University
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Office of Institutional Research, La Salle University, 1900 West Olney Avenue, Philadelphia, PA 19141-1199 (e-mail: roszkows@lasalle.edu).

Abstract

Prior research indicates that relative to men, women generally have lower incomes and typically are more risk averse. In a sample of the clientele of financial planners, men had higher personal incomes and exhibited greater financial risk tolerance, which is consistent with previous studies. The authors' objective was to determine how much of the gender difference in income could be explained by risk tolerance. Results indicate that risk tolerance can explain some of the variation in earnings between women and men but that it is not a primary reason for the wage gap.

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