If you want your daughter to be a high-flying businesswoman or banker, then send her to a single-sex school. This is the conclusion that can be drawn from new research charting the complex relationship between gender and risk-taking.
Next month’s edition of the Economic Journal carries the results of an experiment by two economists at the University of Essex in the UK.
Alison Booth and Patrick Nolen devised a series of questions for 260 male and female pupils that were designed to measure their appetite for risk.
The pupils, from eight state single-sex and coeducational schools in Essex and Suffolk, were asked to choose between a real-stakes lottery and a sure bet. Each student was asked to choose between option 1, which would guarantee they won ￡5 (US$7.7), or option 2, which would see them enter a lottery in which they would flip a coin and receive ￡11 if the coin came up heads or ￡2 if the coin came up tails.
The economists found that, on average, girls, including those from single-sex schools, were 16 percent less likely than boys to opt for the lottery. However, significantly, they found that girls in coed schools were 36 percent less likely to select the lottery than their male peers.
The findings appear to confirm the long-held view that males have a greater appetite for risk than females and go some way to indicating that this may be down to the environment in which a young person grows up.
The economists said that girls attending single-sex schools were as likely as boys to enter the real-stakes gamble and that they were also willing to invest more in a hypothetical risky investment than coed females and all males.
The findings have important implications for the emerging field of experimental economics, which examines why there is an under-representation of women in the City, London’s financial district. If risk attitudes are shaped by environment, changing the educational or training context could help address women’s under-representation in business and banking.
“If the majority of remuneration in high-paying jobs is tied to bonuses based on a company’s performance ... women may choose not to take high-paying jobs because of the uncertainty,” the economists wrote.
Anecdotal evidence suggests the economists may be on to something. Some of the City’s most successful businesswomen went to all-girls’ schools.
Alison Cooper, chief executive of FTSE 100 company Imperial Tobacco, was a pupil at Tiffin Girls’ School, Kingston upon Thames; fund manager Nicola Horlick and financier Baroness Vadera both attended single-sex — albeit private — institutions: Cheltenham Ladies’ College and Northwood College respectively.
The economists said they have yet to explain their findings fully.
However, they suggest that “adolescent females ... may be discouraged from doing so because they are inhibited by culturally driven norms and beliefs about the appropriate mode of female behavior — avoiding risk.”
Once they are placed in an all-female environment, however, this inhibition is reduced.
As Booth and Nolen conclude: “No longer reminded of their own gender identity and society’s norms, they find it easier to make riskier choices than women who are placed in a coed class.”