Lifecycle Patterns in the Socioeconomic Gradient of Risk Preferences

Stefanie Schurer

No 742, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: Who is most likely to change their risk preferences over the lifecourse? Using German nationally representative survey data and methods to separate age from cohort effects, we estimate the lifecycle patterns in the socioeconomic gradient of self-reported risk preferences. Tolerance to risk drops by 0.5 SD across all groups from late adolescence to age 40. From mid to old age, risk tolerance continues to drop for the most disadvantaged, while it stabilizes for all other groups. By age 65, the socioeconomic gradient reaches a maximum of 0.5 SD. Extreme risk aversion among the elderly poor has important policy implications.

Keywords: Risk preferences; socioeconomic inequalities; life-course analysis; cohort effects; SOEP (search for similar items in EconPapers)
JEL-codes: D01 D63 D81 (search for similar items in EconPapers)
Pages: 56 p.
Date: 2015
New Economics Papers: this item is included in nep-age
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Citations: View citations in EconPapers (54)

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Related works:
Journal Article: Lifecycle patterns in the socioeconomic gradient of risk preferences (2015)
Working Paper: Lifecycle Patterns in the Socioeconomic Gradient of Risk Preferences (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp742

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