The Intergenerational Transmission of Risk Preferences: Evidence from Field Experiments in China and Korea

In this study, we conduct field experiments with 196 worker-parent pairs from two companies in China and South Korea and explore factors that affect the similarity of risk preferences between parents and their offspring. In the Chinese data, we show more similar risk preferences between parents and their offspring when there are higher levels of parental involvement and financial parenting. In contrast, in the Korean data, a more demanding parenting style contributes to intergenerational transmission. These effects are mainly captured by the intergenerational transmission from Chinese mothers to their offspring and from Korean fathers to their offspring. In addition, we find that in our study, same-gender transmission contributes highly to intergenerational transmission, and the risk preferences of Chinese workers and their parents are more similar than those of Korean workers and their parents. We also discuss potential differences in the intergenerational transmission of risk preferences between China and Korea and Western countries. Our study provides a better understanding of the formation of individuals’ risk preferences.