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%.
Seminar will be live-streamed, allowing for online audience participation (only available during the seminar)