Self-Directed Pensions: Gender, Risk, and Portfolio Choices

In this paper, I investigate gender differences in financial risk-taking from a new perspective, and I show that gender plays a different role across the risk distribution. To evaluate risk-taking, I exploit portfolio choices following a reform that entitles almost the entire Swedish workforce to choose a risk profile for a part of their public-pension contributions. The novel finding is that portfolio risk does not differ much between the men and women who choose less risky portfolios, while the men who choose risky portfolios take on significantly more risk than do the women who choose risky portfolios. The findings are robust to investors choosing the default alternative, chasing past returns, rebalancing, and different measures of risk-taking.