Risk preferences and child investments: evidence from Mexico

This paper examines how parental risk aversion influences child investments. Using an experimental measure of risk aversion from the Mexican Family Life Survey, I find that boys have higher weight-for-age and BMI-for-age in households where the mother is highly risk averse. The higher BMI is not necessarily healthy because the boys are more likely to be in the overweight range and less likely to be in the normal range. I also find evidence that risk averse mothers spend more on their son’s schooling related expenditures such as materials, uniforms, and spending money. A comparison of siblings reveals a gender gap in child investments that is increasing in maternal risk aversion.