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I’m embarrassed to say that sometimes, as a woman of a socioeconomic privilege, I’ve found it easy to dismiss discussion about the gender gap as just one more topic to create a fuss about on social media. On my list of lingering questions, "Am I paid less than my male counterparts?" doesn't usually make the cut. Often the conversation about the gender pay gap seems restricted to the domain of high-flying CEOs or glamorous film stars.

While it's unlikely that I'll need to negotiate a salary for a Hollywood film anytime soon, at times I've let feelings of inadequacy keep me taking the risks necessary to reach my full potential. I certainly relate to Anne Lamott's wisdom that "perfectionism is the voice of the oppressor." So an article on "the Risky Rhetoric of Female Risk Aversion" in the Stanford Social Innovation Review a while ago piqued my interest. How we act in the face of risk affects man in several aspects of life: how we negotiate, choose jobs, manage finances, and interact with our peers.

The stereotype of women who are risk adverse has been gathering positive momentum across many sectors. Investment corporations have lauded "women as good investments," citing studies that claim their risk adversity translates into higher returns and better outcomes.

In the start ups of Silicon Valley, women succeed on less money with fewer failures than most start-ups. Women who take micro-finance loans in Bangladesh are more likely than men to repay the loans. And the International Monetary Fund chief, Christine Lagarde, went so far as to say that women, with their alleged aversion to risk, could have saved Wall Street from the crash.

This mentality has also ushered in a trend of programs aimed at capitalizing on risk-adversity. For instance, Goldman Sach’s 10,000 Women entrepreneurial initiative and ETFs like SHE that support women in leadership. These movements provide women with capital, networking, and training opportunities and promote the image of women as responsible managers of assets. These programs offer many opportunities for women, but the new Stanford study challenges their motivating assumption that women as risk adverse is wholly a good thing. 

As researchers Kaplan and Walley point out, this stereotype of women is a “double-edged sword.” “It is this association—that female risk aversion stems from a lack of confidence, instead of, say, intelligence—that makes it a backhanded compliment and a limiting stereotype.” Their study synthesized 112 reports from popular media, NGOs, and corporations that almost universally assumed a significant difference between men and women with regards to risk aversion.   

A study of UK schools corroborated the idea that women are not inherently more risk averse. The study found girls and boys educated at single-sex schools are equally likely to take a high-stakes gamble. However, when the single-sex cohorts were compared to groups from a coed school, they found that girls were less likely to take a risky gamble than boys. This tells us that risk aversion may be a product of social learning as opposed to inherent gender differences.

More study is needed to understand the root causes of this difference. Kaplan and Walley point out that the stakes are not the same for men and women in social settings. For instance, consider women in leadership. Women in high-power roles are perceived as too soft or too tough but never just right, and they often face higher standards and lower rewards than their male counterparts. The pressures that women in high-level positions face to prove that they can do the job as well as (or better) than a man seem to always permeate the workplace hierarchy. The social stakes are simply higher for women, which could lead them to adopt a risk-averse stance.

The seemingly benign stereotype of women as risk-averse may mask the root causes of women acting more cautious. Frankly, they may just have more to lose. As mentioned above, research delivers glowing reports of women who are more likely than their male counterparts to repay micro-loans in full. On the surface—this sounds like a cause for celebration. But we need to examine the reasons for why a woman may engage in less financially risky behavior. Further exploration of this issue in an Indian village showed that women succeeded in repaying loans because they were motivated by external pressures—an unexpected visit to the doctor for appendicitis, medical bills for a daughter’s pregnancy. As the breadwinners and primary caregivers in the family, the women did not engage in financial risk because the stakes were already too high. For many women, entrepreneurial risk is a luxury they simply cannot afford.

Before we laud the stereotype of women as "safe investments," we need to consider the realities of social expectations and external pressures. The stereotype of women as risk-averse pervades socioeconomic class and career sectors. Counteracting the stereotype may look different in every situation. The finance sector might stop taking stereotypical male risk-seeking behavior as the baseline to measuring the success of men and women alike. Nonprofits could consider what the hidden costs are to women who pursue economic advancement. Education methods might take a leaf from the Girls Who Code school of thought and encourage young girls to have the courage to keep pursuing new ideas.

Research suggests that women may not take risks because they cannot afford to do so. The risks of ridicule, heightened anxiety, or economic pressures can prevent women from taking a chance and reaching their full potential. Women, regardless of class, should have the right to creativity—or put another way, the right to fail. The right to take chances that may not pan out. Gender disparities matter because the places where women cannot afford to take chances may expose places of societal injustices that we simply cannot afford to dismiss. 

Photo Credit: Brittni Willie Photography