Gender Differences in Wealth at Retirement

The gender gap in wealth at retirement is a cause for concern if it does not simply reflect individual choices based on heterogeneous preferences. This paper contributes to our understanding of this issue by asking whether the unexplained portion of the gap can be attributed to gender differences in risk preferences. Previous literature suggests that women may be more risk averse than men, and our theoretical framework illustrates that more risk averse people accumulate less wealth at retirement. We test these predictions using an accurate cardinal measure of risk preferences from the Health and Retirement Study. The results indicate that there is indeed a negative correlation between risk aversion and wealth accumulation, but the relationship is not strong enough to account for the unexplained portion of the gender gap in wealth. Thus, the gender difference in retirement wealth continues to be a cause for concern.