Gender gap in bankruptcy risks: its meaning for policy at home, at work

THERE is a saying, "Life is all about taking risks. If you never take a risk, you will never achieve your dreams".

It appears that this is an anthem that men go by. Studies have shown men to be more willing to take risks than women. But some of such risk-taking behaviours have landed them in the soup.

In the United States, men trade 45 per cent more than women and this higher trading activity has led to poorer portfolio returns compared to their less-risky female counterparts. In some instances, this has resulted in indebtedness; more men than women are considered bankruptcy risks. In the United States, the proportion of female bankrupts is 29 per cent lower than male bankrupts.

One of the drivers of such differences in risk preferences is their perception of risks. Men are more likely to see a risky situation as a challenge that calls for participation; women see the same situation as a threat that discourages…