Education and Gender Differences in Risk Aversion: Experimental Evidence from Six Latin American Cities

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Gender differences in risk aversion may be an additional explanatory factor for the gaps between men and women in the labor market and the business environment, particularly for outcomes that depend on decisions under uncertainty. Using experimental data collected in six Latin American cities, this paper examines whether there are gender differences in the socioeconomic characteristics associated with individuals’ risk aversion. We particularly focus on the role education plays at explaining these differences. Using regression analyses and decomposition methods, we find, in-line with a large body of literature, statistically significant evidence that suggests women are, on average, more risk-averse than men. Education and age are the observable variables that have the strongest association with risk behavior; however, these associations are not necessarily invariant across gender and risk-type. In addition, these differences are observed mainly in individuals with a higher educational level, which may suggest that, among women, the recognition of a risky situation that education allows is more important than the tools that such education provides to manage it.