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Risk Aversion and Son Preference: Experimental Evidence from Chinese Twin Parents

Listed author(s):
  • Soo Hong Chew

    ()

    (National University of Singapore)

  • Junjian Yi

    ()

    (The University of Chicago)

  • Junsen Zhang

    ()

    (Chinese University of Hong Kong)

  • Songfa Zhong

    ()

    (National University of Singapore)

We study the role of risk aversion underlying son preference in patriarchal societies, where sons serve as better insurance for old-age support than daughters. The implications of an insurance motive on son preference are two-fold. First, prior to the birth of their children, more risk-averse parents have a stronger preference for sons than for daughters. Second, after the birth of their children, parents with sons are more risk seeking, compared to parents with daughters. We adopt a within-twin-pair fixed-effects estimator with a weak identification assumption, which enables us to jointly identify these two effects. We further conduct an incentivized choice experiment to assess parental risk attitude in a sample of Chinese twins with children, and follow up with a second twin sample to examine the replicability of the findings. In both samples, we find that parents with higher risk aversion before the birth of their children are more likely to have sons through sex selection than parents with lower risk aversion. Additionally, having sons significantly decreases parental risk aversion. These results contribute to the literature on the sources of son preference and help shed light on the nature of gender inequality.

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File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Chew_Yi_etal_2017_risk-aversion-son-preference.pdf
File Function: First version, February 11, 2017
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Paper provided by Human Capital and Economic Opportunity Working Group in its series Working Papers with number 2017-028.

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Date of creation: Apr 2017
Handle: RePEc:hka:wpaper:2017-028
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