b'AGING IN THE 21ST CENTURYAll three groups ofgamblebeing more risk averse that husbands have the final say, but only 5% women in the Lee andis associated with lower wealthagree that the wife has the final say. Rowley study hold rela- accumulation at retirement.For the purposes of this study, being the tively low proportionsWomen are indeed more riskfinancial respondent, having the final say in of their net worth inaverse than men, and therefinancial decisions, and having higher income stocks, bonds, CDs/ is a negative associationtogether comprise an index of bargaining power. Tbills, IRAs andbetween risk aversion andSpouses with bargaining power are less likely to other investments.wealth. This associationexperience declines in their living standard at This can have a nega- is most pronounced forwidowhood.tive impact on wealththe wealthiest households. accumulation. HoganInterestingly, for householdsWill the change from defined and Perrucci (2007) findwith very low wealth, being riskbenefit to defined contribution that women in poor health areaverse is actually positively associatedpensions leave retirees less least likely to hold adequate risk inwith wealth. If there were no gender dif-their financial portfolios. Earning less than a highference in risk aversion, the wealth gap betweenfinancially prepared?school degree is associated with a low-risk port- men and women would diminish. Women also folio. Black women are 68% less likely to hold atend to report lower levels of financial knowledgeThe Changing Pension Landscapewell-balanced portfolio than White women. Other(Lusardi and Mitchell 2008), which may helpThe most striking feature of the pension land-forces contribute to worse retirement prospectsexplain their lower inclination to gamble withscape over the last 40 years is the ongoing shift for Black women as well. Even after accountingfinances. from defined benefit (DB) to defined contribution for employment earnings and the decision toBabiarz et al. (2012) use couples data from(DC) plans. Traditional DB pensions depend pri-retire, Black women in the HRS receive the lowest1992 through 2004 to study the effect of house- marily on employees years of service and salary. level of retirement income.hold bargaining power on wealth accumulation.On the other hand, DC plan benefits depend on In the HRS, couples in married or partneredhow much employers and employees contribute to If there were no gender differencehouseholds are asked to say who is the more fi- investment funds, how long the funds are invest-in risk aversion, the wealth gapnancially knowledgeable. That person is designat- ed, and how well they do. Will the change from ed as the financial respondent for the interviewDB to DC pensions leave retirees less financially between men and women and answers all financial questions on behalf ofprepared? Poterba et al. (2007) find that DC plans would diminish. the household. Sixty-seven percent of husbandsgenerate more wealth on average than private or male partners are designated as the financialsector DB plans, but not more than public sector Some of the wealth differences between menrespondent. Participants are also asked who hasDB plans, which tend to have more generous plan and women at retirement may be the result ofthe final say in financial decisions. Forty-fourprovisions. A relatively small fraction of workers womens lower level of risk tolerance. Using ques- percent of households say they both have an equalremain with firms long enough, often 30 years, to tions in the HRS from 2006 about participantssay in major financial decisions, but 35% disagreequalify for DB pensions, however.willingness to gamble their money, Neelakantanabout who has the final say. Sixteen percent agree and Chang (2010) show that lower willingness to 56'