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Risk Attitudes and the Gender Pay Gap: Evidence from a Developing Country

September 12, 2019

DECRG Kuala Lumpur Seminar Series

  • This paper estimates the effect of risk attitudes on the gender pay gap using a representative survey for Chile. The estimation corrects for the endogeneity between wages and risk aversion starting from the background risk hypothesis. By using measures of economic risk and exposure to natural disasters over a 30-year period, the paper shows that risk aversion has a negative and statistically significant effect on wages. The effect of risk attitudes on wages is not significantly different for men and women. However, the results show that not accounting for the endogeneity between risk attitudes and wages result in an overestimation of the gender pay gap. After correcting for endogeneity bias, the estimated gender payment gap decreases from 19% to 11%.

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  • Marcela Parada-Contzen is an Assistant Professor at the Department of Industrial Engineering at Universidad de Concepcion, Chile. She obtained a B.Sc. in Economics and a Business professional degree from Universidad de Concepcion, Chile, an M.Sc. in Economics and a Ph.D. in Economics from the University of North Carolina at Chapel Hilll, USA. Her research interests span applied microeconomics in the areas of labor economics, risk and uncertainty, and health economics. Most of her research focuses in the design of retirement income policies in privately managed defined contribution retirement systems. In her research, she also works to understand differences in risk preferences through an individual life cycle and the economic effects of heterogeneity in risk aversion across individuals. She also has an interest in non-market valuation of risks.


  • WHEN: Thursday, September 12, 2019; 12:30 -2:00PM
  • WHERE: World Bank Malaysia Office, Level 3, Sasana Kijang, No. 2, Jalan Dato’ Onn
  • RSVP: Kindly RSVP by Wednesday, September 11, 2019