Choice of Retirement Funds in Chile: Are Chilean Women More Risk Averse than Men?

This study examined the investment decisions of women and men in Chile who were contributing to Chile's mandatory defined contribution (DC) retirement plan, using a large survey of participants (2782 people) conducted in 2009 by Chile's Subsecretariat of Social Protection. The basic research questio...

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Published in:Sex Roles Vol. 72; no. 1-2; pp. 50 - 68
Main Authors: Kristjanpoller, Werner, Olson, Josephine
Format: Article
Published: Springer Nature Jan2015
Subjects:
Online Access:View this record in EBSCOhost
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        10.1007/s11199-014-0439-8
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          Kristjanpoller, Werner
          Olson, Josephine
        affil:
          Departamento de Industrias, Universidad Técnica Federico Santa María, Av. España 1680 Valparaíso Chile
          Joseph M. Katz Graduate School of Business, University of Pittsburgh, 308 Mervis Hall Pittsburgh 152160 USA
      su:
        Chile
        Gender differences (Sociology)
        Risk aversion
        Sociodemographic factors
        Investment of pension funds
        Pension trusts
        Defined contribution pension plans
        Investment policy
        Chile. Superintendencia de Pensiones
      sug:
        subj:
          Gender differences (Sociology)
          Risk aversion
          Sociodemographic factors
          Chile
          Pension Funds
          Non-trusteed pension funds
          Trusteed pension funds
          Investment of pension funds
          Pension trusts
          Defined contribution pension plans
          Investment policy
          Chile. Superintendencia de Pensiones
      keyword:
        Chile's retirement plan
        Defined Contribution Pension Plans
        Gender differences in risk taking
        Portfolio choice
        Chile's retirement plan
        Defined Contribution Pension Plans
        Gender differences in risk taking
        Portfolio choice
      ab: This study examined the investment decisions of women and men in Chile who were contributing to Chile's mandatory defined contribution (DC) retirement plan, using a large survey of participants (2782 people) conducted in 2009 by Chile's Subsecretariat of Social Protection. The basic research question was whether Chilean women were more risk averse in their retirement investment decisions than Chilean men. Chile's retirement plan offers a default plan for those who do not want to manage their funds. For those wishing to manage their investments, it offers five funds varying in risk from an all bond fund to a fund that is primarily stocks. There was no significant difference in the percentage of men and women choosing the default funds. We used probit analysis to determine what demographic factors affected the choice of the default fund, and found that younger people and men with less education and less income were more likely to choose the default; only age was significant for women. We found no significant gender differences in the fund choices of active investors. We conducted linear regression analysis by gender, where the dependent variable was the fund, with fund 1 having the lowest risk and fund 5 having the highest risk. We found that that the risk taking decreased with age and increased with financial knowledge, psychological risk tolerance, income and unemployment. Chilean women and men seemed similar in their investment decisions.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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