New research shows that women are more likely to take risks when they are surrounded by other women. The results, published in the February 2012 issue of the Economic Journal, could help to reduce gender inequality in the workforce.
In an experiment at the University of Essex, Professor Alison Booth and Dr Patrick Nolen, tested whether or not girls in single-sex groups or from single-sex schools had different attitudes towards risk than girls in co-educational groups or those from co-educational schools.
Dr Nolen says that the results show that risk-taking in women comes down to ''social learning'' and environmental factors rather than inherent gender traits. He explains how the research was done and what it found:
- ''We designed a controlled experiment using students from years 10 or 11 who made choices about real-stakes lotteries in different environments. Students were randomly assigned to either all-female, all-male or mixed gender groups.
- ''We found that, on average, women were less likely to make risky choices than men when they were in mixed gender groups. This result, and the size of the difference, were similar to that found by other researchers.
- ''But when assigned to all-female groups, women were just as likely to take risks as men. Interestingly, the risk-taking behaviour of men was unaffected by group composition.''
Dr Nolen notes that the findings have significant implications for the labour market:
- ''Recent studies in experimental economics have shown that on average women are more risk-averse than men. If much of the remuneration in high?paying jobs consists of bonuses linked to a company''s performance, relatively fewer women will choose high?paying jobs because of the uncertainty.
- ''The importance of our findings is that they show that risk-taking behaviour is not necessarily innate – it can be affected by the environment in which the individual is placed.
- ''Given that risk attitudes can be shaped by the environment, changing the educational or training context could help address the under-representation of women in certain areas.''
Asked what might explain these results, Dr Nolen suggests that:
- ''Even women who are intrinsically more willing to make riskier choices may be discouraged from doing so because they are inhibited by culturally?driven norms and beliefs about the appropriate mode of female risk-avoiding behaviour.
- ''But once they are placed in an all-female environment, this inhibition is reduced.''
"Gender Differences in Risk Behaviour – Does Nurture Matter?'' by Alison Booth and Patrick Nolen is published in the February 2012 issue of the Economic Journal.
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