Risk Preferences and the Timing of Marriage and Childbearing

Lucie Schmidt, Williams College

In this paper, I examine the role that risk aversion plays in women’s choices regarding marriage timing and fertility timing. I use survey questions in the PSID designed to measure risk aversion to address the following questions: (1) Do women who are highly risk averse marry earlier in life to control for the risk of not finding an acceptable mate? (2) What effect do risk preferences have on fertility timing? I find evidence that measured risk preferences significantly affect women’s marriage timing. In addition, risk preferences have an independent effect on fertility timing, and that this effect varies by age, marital status, and education. These findings may have broader implications. Early first marriages are more likely to lead to divorce. Early first births are often associated with negative child outcomes, while excessive delay of first births could lead to permanent infertility. Risk preferences may therefore have real effects on well-being.