Why Are There Fewer Women In High-Paying Jobs, Upper Management? | Study Cites These Surprising Reasons

A recent study published in the British Journal of Psychology has shed light on the reasons behind women's tendency to take fewer risks than men, according to an IANS report. The research indicates that women's lower willingness to take risks is primarily attributed to their heightened sensitivity to potential losses and the associated pain, rather than the potential gains. Additionally, the study found that men exhibit significantly higher levels of optimism, which contributes to their greater risk-taking behavior.

The report added that Dr. Chris Dawson, Associate Professor of business economics at the University of Bath's School of Management, highlighted the implications of these gender differences. He noted that the disparities in risk-taking behavior can help explain the underrepresentation of women in entrepreneurship, high-paying jobs, upper management roles, and their lower inclination to invest in equity markets compared to men.

Dr. Dawson emphasized the need for further research to better understand the underlying factors that contribute to women's lower risk appetite. The study examined two psychological characteristics, loss aversion (the tendency to weigh losses more heavily than gains) and optimism, to explain these gender differences. The findings revealed that women's focus on the possibility of experiencing losses and their anticipation of greater pain from potential losses lead to their overall lower risk tolerance.

To assess loss aversion, Dr. Dawson analyzed data from a survey of 13,575 individuals, specifically examining the impact of changes in household income on psychological well-being. The study found that men experience less pain from income losses compared to women, while both genders have similar psychological responses to income gains.

Regarding financial expectations for the future, men displayed significantly higher levels of optimism than women. This optimism may be linked to men's tendency towards overconfidence in their abilities, a characteristic that previous studies have highlighted.

The research suggests that women's lower optimism about favorable outcomes and their lesser confidence in their abilities contribute to their perception of greater risk in decision-making.