Does society influence the gender gap in risk attitudes? Evidence from East and West Germany

• Previous international research has shown that women are on average more risk averse than men. • Comparing East and West Germans, we examine if this gender gap is shaped by society. • We find that the gender gap in risk attitudes is smaller among East Germans. • This specifically holds with respect to career and financial matters. • The findings support the hypothesis that the gender gap is smaller if a society has more equal gender roles. Previous international research suggests that women are on average more risk averse than men. This gives rise to the question of whether the gender gap in risk attitudes is shaped by the social environment. We address this question by examining risk attitudes among East and West Germans. Even many years after reunification, East Germans have much more equal gender roles than West Germans. Thus, if the gender gap reflects socially constructed norms, it should be smaller among East Germans. Using data of the German Socio-Economic Panel (SOEP), our empirical analysis confirms this prediction. Specifically with respect to career and financial matters, the gender gap in risk tolerance is smaller among East Germans. We find no evidence that the East German gender gap has converged to the higher West German level after reunification. By contrast, our estimates provide some cautious indications that the West German gap has narrowed over time.