Gender, Risk, and Retirement

By Bernasek, Alexandra; Shwiff, Stephanie | Journal of Economic Issues, June 2001 | Go to article overview

Gender, Risk, and Retirement


Bernasek, Alexandra, Shwiff, Stephanie, Journal of Economic Issues


Women are more vulnerable than men to poverty in their older age. They earn less than men over their working lives and accumulate less savings for retirement. These savings typically have to be spread over a longer period of time since women live longer on average than men, and they must meet higher expenditures since women also experience more chronic health problems as they age. Saving for retirement is increasingly taking the form of investment in financial assets. The proportion of private pensions that are defined contribution plans is increasing, and policy makers are considering the privatization of Social Security. In this environment women's well-being in retirement will depend more heavily on their attitudes toward risk and the impact of those attitudes on investment decisions.

There is evidence that women are more risk averse than men when their entire portfolio of assets is considered (Jianakoplos and Bernasek 1998, Palsson 1996). If women are on average less willing to take risks than men, they are also expected to accumulate less wealth on average, since lower risk is associated with lower returns on investment. Some researchers have looked specifically at pension assets and individuals' willingness to take risks as evidenced by the allocation of their pensions to stocks versus bonds. Several studies have found that women invest their pension assets more conservatively than men--allocating a smaller percentage to stocks than bonds (Bajtelsmit and Vanderhei 1996; Hinz, McCarthy, and Turner 1996; Bajtelsmit, Bernasek, and Jianakoplos 1999).

One of the major limitations of previous studies of gender and risk aversion is their inability to deal with the problem of who makes investment decisions in married and cohabitating couple households. If a female respondent who is married holds a risky portfolio of wealth, we do not know if this reflects her attitudes toward risk or her partner's, or some combination. Nancy A. Jianakoplos and Alexandra Bernasek (1998) tried to overcome this problem by comparing single women, single men, and married couples in terms of their risk aversion. They found that single women are more risk averse than single men and married couples. One of the problems with this is that single women and men are not necessarily representative of women and men in general. When looking at private pension allocation decisions, it seems more likely that the individual who has the pension makes the allocation decision with regard to the pension, but still it seems reasonable that a partner's attitudes toward risk (especially as it affects how the household portfolio of assets is allocated) will have some effect on that decision. The purpose of this paper is to examine the determinants of an individual's allocation of defined contribution pension assets to stocks when we have detailed information about gender and the household financial decision-making process.

Data and Descriptive Statistics

The data used in this paper came from a survey of faculty employed at five universities in Colorado.' The data were collected in the form of a mail survey conducted in spring 2000. The purpose of conducting such a selective survey was to produce a relatively small data set with very detailed information about household financial decision making which could be used as a pilot study to see if the collection of such detailed information on a larger scale would be warranted. Also, by focusing on academics only, the issue of level of education was controlled for and a potentially more significant factor--the type of education or discipline--could be examined.

Given the specific nature of the questions asked in the survey, there were only 270 observations in our sample--those who had complete information on the percentage of their defined contribution pension invested in stocks, as well as on the other explanatory variables. Means of the variables are presented in table 1. The means of several of the variables differed by gender at the 1 percent level of significance. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Gender, Risk, and Retirement
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.