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Marriage and Other Risky Assets: A Portfolio Approach

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  • Bertocchi, Graziella

    ()
    (University of Modena and Reggio Emilia)

  • Brunetti, Marianna

    ()
    (University of Rome Tor Vergata)

  • Torricelli, Costanza

    ()
    (University of Modena and Reggio Emilia)

Abstract

We study the joint impact of gender and marital status on financial decisions. First, we test the hypothesis that marriage represents - in a portfolio framework - a sort of safe asset, and that this effect is stronger for women. Controlling for a number of observable characteristics, we show that single women have a lower propensity to invest in risky assets than married females and males. Second, we show that the differential behavior of single women evolves over time, reflecting the increasing incidence of divorce and the expansion of female labor market participation. In particular, towards the end of our sample period, we observe a reduction in the gap between women with different family status, which can be attributed to the gradual erosion of the perception of marriage as a sort of safe asset. Our results therefore suggest that the differential behavior of single vs. married women can be explained by the evolution of gender roles in society, even after controlling for differential risk attitudes. Our empirical investigation is based on a dataset drawn from the 1989-2006 Bank of Italy Survey of Household Income and Wealth.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3975.

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Length: 34 pages
Date of creation: Jan 2009
Date of revision:
Handle: RePEc:iza:izadps:dp3975

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Keywords: divorce; marriage; labor force participation; portfolio choice;

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References

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  1. Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe & Schupp, Jürgen & Wagner, Gert G., 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," IZA Discussion Papers 1730, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Siobhan Austen & Rachel Ong & Sherry Bawa & Therese Jefferson, 2013. "Trends in the Gender Wealth Gap Among Single Households in Australia, 2002-2010," Bankwest Curtin Economics Centre Working Paper series WP1308, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
  2. Graziella Bertocchi & Marianna Brunetti & Costanza Torricelli, 2012. "Is it money or brains? The determinants of intra-family decision power," CEIS Research Paper 238, Tor Vergata University, CEIS, revised 15 Jun 2012.
  3. Giarda, Elena, 2013. "Persistency of financial distress amongst Italian households: Evidence from dynamic models for binary panel data," Journal of Banking & Finance, Elsevier, vol. 37(9), pages 3425-3434.
  4. Atella, Vincenzo & Brunetti, Marianna & Maestas, Nicole, 2012. "Household portfolio choices, health status and health care systems: A cross-country analysis based on SHARE," Journal of Banking & Finance, Elsevier, vol. 36(5), pages 1320-1335.
  5. Ganguli, Ina & Hausmann, Ricardo & Viarengo, Martina, 2010. "“Schooling Can’t Buy Me Loveâ€: Marriage, Work, and the Gender Education Gap in Latin America," Scholarly Articles 4448873, Harvard Kennedy School of Government.

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