Lifecycle Patterns in the Socioeconomic Gradient of Risk Preferences

Stefanie Schurer

No 8821, IZA Discussion Papers from Institute of Labor Economics (IZA)

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: life-course analysis; socioeconomic inequalities; risk preferences; cohort effects; SOEP (search for similar items in EconPapers)
JEL-codes: D01 D63 D81 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2015-01
New Economics Papers: this item is included in nep-age
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Citations: View citations in EconPapers (51)

Forthcoming - published in: Journal of Economic Behavior and Organization,119, 482-495, 2015

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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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