Virtually all current theories of choice under risk or uncertainty are cognitive and consequentialist. They assume that people assess the desirability and likelihood of possible outcomes of choice alternatives and integrate this information through some type of expectation-based calculus to arrive at decision. The authors propose an alternative theoretical perspective, the risk-as-feelings hypothesis, that highlights the role of affect experienced at the moment of decision making. Drawing on research from clinical, physiological, and other subfield of psychology, they show that emotional reactions to risky situations often drive behavior. The risk-as-feelings hypothesis is shown to explain a wide range of phenomena that have resisted interpretation in cognitive-consequentialist terms.

Risk as Feelings

Virtually all current theories of choice under risk or uncertainty are cognitive and consequentialist. They assume that people assess the desirability and likelihood of possible outcomes of choice alternatives and integrate this information through some type of expectation-based calculus to arrive at a decision. The authors propose an alternative theoretical perspective, the risk-as-feelings hypothesis, that highlights the role of affect experienced at the moment of decision making. Drawing on research from clinical, physiological, and other subfields of psychology, they show that emotional reactions to risky situations often diverge from cognitive assessments of those risks. When such divergence occurs, emotional reactions often drive behavior. The risk-as-feelings hypothesis is shown to explain a wide range of phenomena that have resisted interpretation in cognitive-consequentialist terms.

Risk as feelings.

Survey research finds that mothers suffer a substantial wage penalty, although the causal mechanism producing it remains elusive. The authors employed a laboratory experiment to evaluate the hypothesis that status-based discrimination plays an important role and an audit study of actual employers to assess its real-world implications. In both studies, participants evaluated application materials for a pair of same-gender equally qualified job candidates who differed on parental status. The laboratory experiment found that mothers were penalized on a host of measures, including perceived competence and recommended starting salary. Men were not penalized for, and sometimes benefited from, being a parent. The audit study showed that actual employers discriminate against mothers, but not against fathers.

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Getting a Job : Is There a Motherhood Penalty?

We find that single women exhibit relatively more risk aversion in financial decision making than single men. Using U.S. sample data, we examine household holdings of risky assets to determine whether there are gender differences in financial risk taking. As wealth increases, the proportion of wealth held as risky assets is estimated to increase by a smaller amount for single women than for single men. Gender differences in financial risk taking are also influenced by age, race, and number of children. Greater financial risk aversion may provide an explanation for women's lower levels of wealth compared with men's. (JEL J16, D81, G11)

Are women more risk averse

This article reviews more than 200 scholarly articles and books on household labor published between 1989 and 1999. As a maturing area of study, this body of research has been concerned with understanding and documenting how housework is embedded in complex and shifting social processes relating to the well-being of families, the construction of gender, and the reproduction of society. Major theoretical, methodological, and empirical contributions to the study of household labor are summarized, and suggestions for further research are offered. In summary, women have reduced and men have increased slightly their hourly contributions to housework. Although men's relative contributions have increased, women still do at least twice as much routine housework as men. Consistent predictors of sharing include both women's and men's employment, earnings, gender ideology, and life-course issues. More balanced divisions of housework are associated with women perceiving fairness, experiencing less depression, and enjoying higher marital satisfaction.

Research on household labor : Modeling and measuring the social embeddedness of routine family work

Using a new data set, this paper gives evidence in support of the intuitive notion that overqualified workers are less satisfied with their jobs and are more likely to quit. However, training time is inversely related to overqualification, which suggests why such seeming mismatches occur and may in fact be optimal. Copyright 1991 by MIT Press.

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Education Match and Job Match

Although the primacy of household responsibilities in determining gender differences in labor market outcomes is universally recognized, there has been little investigation of the direct effect of housework on wages Using data from the Panel Study of Income Dynamics, cross-sectional wage regressions reveal a substantial negative relation between wages and housework for wives, which persists in specifications controlling for individual fixed effects The evidence for husbands is inconclusive Married women's housework time is, on average, three times that of married men's The addition of housework time to the wage equations increases the explained component of the gender wage gap from 27-30 percent to 38 percent

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Housework, Fixed Effects, and Wages of Married Workers

Using data from a large national survey, this paper documents substantial differences by gender and race in smoking behavior, seat belt use, preventative dental care measured by teeth brushing and flossing, exercise, and whether the individual checks his or her blood pressure. White women are the most protective of their health, while black males are the least likely to take health-enhancing actions. However, the racial gap in safety behavior narrows considerably or reverses after controlling for demographic, human capital, and labor market characteristics that affect safety choices. On the other hand, the safety gap by gender increases after controlling for characteristics.

Smoking, seat belts, and other risky consumer decisions: Differences by gender and race

Empirical research has consistently shown that married men have substantially higher wages, on average, than otherwise similar unmarried men. One commonly cited hypothesis to explain this pattern is that marriage allows one spouse to specialize in market production and the other to specialize in home production, enabling the former - usually the husband - to acquire more market-specific human capital and, ultimately, earn higher wages. The authors test this hypothesis using panel data from the National Survey of Families and Households. The data reveal that married men spent virtually the same amount of time on home production as did single men, albeit on different types of housework. Estimates from a fixed effects wage equation indicate that the male marriage wage premium is not substantially affected by controls for home production activities. Household specialization, the authors conclude, does not appear to have been responsible for the marriage premium in this sample.

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Household Specialization And The Male Marriage Wage Premium

Using a large data set, the authors find that smokers select riskier jobs, but receive lower total wage compensation for risk than do nonsmokers. This finding is inconsistent with conventional models of compensating differentials. The authors develop a model in which worker risk preferences and job safety performance lead to smokers facing a flatter market offer curve than nonsmokers. The empirical results support the theoretical model. Smokers are injured more often controlling for their job's objective risk and are paid less for these risks of injury. Smokers and nonsmokers, in effect, are segmented labor market groups with different preferences and different market offer curves.

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Joni Hersch

Papers

Education Match and Job Match

Housework, Fixed Effects, and Wages of Married Workers

Smoking, seat belts, and other risky consumer decisions: Differences by gender and race

Household Specialization And The Male Marriage Wage Premium

Cigarette Smokers as Job Risk Takers