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Home Publications Parental socialisation effort and the intergenerational transmission of risk preferences

Parental socialisation effort and the intergenerational transmission of risk preferences

Sule Alan, Nazli Baydar, Teodora Boneva, Thomas Crossley and Seda Ertac
IFS Working Paper W13/12

We study the transmission of risk attititudes in a unique survey of mothers and children in which both participated in an incentivised risk preference elicitation task. We document that risk preferences are correlated between mothers and children when the children are just 7 to 8 years old. This correlation is only present for daughters. We show that a measure of parental involvement is a strong moderator of the association between mothers' and daughers' risk tolerance. These findings support a role for socialisation in the intergenerational transmission of preferences that predict economic behaviour.