The Impact of Family Structure in Determining Individual Risk Attitudes among African American Girls

Most papers find that women are more risk averse than men; the one consistent factor across research is that environment shapes a person’s risk preferences. Using data from the Panel Study of Income Dynamic (PSID) and a field experiment, we are able to examine the factors that influence individuals risk attitudes. My thesis will look at two distinct family environments, a nuclear family versus a single mother household, with emphasis on the African American community. In a nuclear family, usually, the man is the breadwinner and decision maker, a child has the influence of both a father and a mother. A father’s influence has been linked to have an impact on a child’s emotional development and their attitude towards others. In a single-mother household, the woman is the breadwinner and the decision-maker, she has to work as well as take care of the child. If that child has no male influence, she might grow up being encouraged to take more risks. Therefore, my hypothesis is, girls who grow up in single-mother households might be more risk loving than girls who grow up in a nuclear household. We find that African American girls who grow up in a single mother household are less risk averse compared to girls who grow up in a nuclear household. However, boys who grow up in a single mother household are more risk averse than boys who grow up in a nuclear family. These results show that there is a male-female gender gap in risk attitudes among those who grow up in nuclear family households.