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Intergenerational Transmission of Risk Preferences, Entrepreneurship, and Growth

Author

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  • Fabrizio Zilibotti

    (University of Zurich)

  • Matthias Doepke

    (Northwestern University)

Abstract

We develop a theory of the intergenerational transmission of risk preferences. Parents can instill either risk tolerance or risk aversion in their children, and face both altruistic and paternalistic motives in this process. Risk-tolerant children are more likely to benefit from profitable but risky opportunities, such as the career choice of being an entrepreneur. However, risk-tolerant children may also engage in other risky choices (such as smoking or riding motorcycles) that the parents disagree with. In our model, the transmission of risk preferences feeds back into the growth rate of the economy, because risk-taking entrepreneurs are essential for endogenous technological innovation. The theory has implications for how the extent and nature of risk in the economic environment affects the transmission of risk preferences, entrepreneurship, and growth.

Suggested Citation

  • Fabrizio Zilibotti & Matthias Doepke, 2012. "Intergenerational Transmission of Risk Preferences, Entrepreneurship, and Growth," 2012 Meeting Papers 246, Society for Economic Dynamics.
    • Handle: RePEc:red:sed012:246
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    References listed on IDEAS

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    Cited by:

    1. Daron Acemoglu, 2022. "Obedience in the Labour Market and Social Mobility: A Socioeconomic Approach," Economica, London School of Economics and Political Science, vol. 89(S1), pages 2-37, June.
    2. J. Ignacio Giménez-Nadal & Lucia Mangiavacchi & Luca Piccoli, 2016. "Mobility across generations of the gender distribution of housework," DEA Working Papers 80, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    3. J. Ignacio Gimenez-Nadal & Jose Alberto Molina & Raquel Ortega, 2017. "Like my parents at home? Gender differences in children’s housework in Germany and Spain," Empirical Economics, Springer, vol. 52(4), pages 1143-1179, June.
    4. J. Ignacio Gimenez-Nadal & José Alberto Molina & Yu Zhu, 2018. "Intergenerational mobility of housework time in the United Kingdom," Review of Economics of the Household, Springer, vol. 16(4), pages 911-937, December.

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