Financial and ethical risk-taking by young adults: A role for family dynamics during childhood

Abstract

The research tested the hypothesis that childhood relationships with parents were related to risk-taking by young adults. Prior research has shown that risk-taking by young children is related to their interactions with mothers and fathers. Few studies have examined how family relationships during childhood are related to risk-taking by young adults. We assessed risk-taking using the domain-specific risk-taking scale (DOSPERT), which measures five domains of risk-taking: ethical, financial, health, recreational, and social. We also assessed sensation-seeking, a personality trait that has been shown to be a predictor of risk-taking and family dynamics, using a measure that quantifies positive and negative childhood relationships with each parent. The three key results were (1) negative mother interactions predicted men’s financial risk-taking; (2) negative father interactions and disinhibition predicted men’s ethical risk-taking; and (3) women’s ethical risk-taking was predicted by negative father interactions, low positive mother interactions, and boredom susceptibility. Implications for identifying young adults most at-risk for ethical and financial risk-taking are discussed.

Keywords:

• ethical risk-taking
• financial risk-taking
• young adults
• family dynamics
• sex differences

Public Interest Statement

Financial and ethical risk-taking by young adults can lead to dire life consequences, including going into significant debt without the means to repay the debt and also engaging in illegal activities. Our results showed that both types of risk-taking were related to childhood relationships with parents. For men, higher levels of negative interactions with their mothers during childhood predicted higher amounts of financial risk-taking and higher levels of negative interactions with their factors predicted higher amounts of ethical risk-taking as did the personality trait of enjoying being out of control. For women, higher amounts of ethical risk-taking were predicted by higher levels of negative interactions with their fathers, along with lower positive interactions with their mothers and the personality trait of being prone to boredom. These results may be useful in identifying those young adults mostly likely to engage in financial and ethical risk-taking.

Additional information

Funding

This work was supported by the NSF [grant number SMA 1358847].

Notes on contributors

Shelia M. Kennison

Shelia Kennison received her PhD in Cognitive Psychology from the University of Massachusetts, Amherst. In addition to numerous research reports, she is the author of the textbook Introduction to Language Development published by Sage in 2013 and the forthcoming Psychology of Language to be published by Palgrave in 2017.

Erin E. Wood

Erin Wood and Megan Dowling are graduate students in the Experimental Psychology PhD program at Oklahoma State University. Erin’s interests are primarily in developmental psychology, specifically the role of parenting on child development. Megan’s interests are primarily in the area of social psychology, specifically sex and gender differences in cooperation.

Jennifer Byrd-Craven

Jennifer Byrd-Craven received her PhD in Evolutionary Psychology from the University of Missouri in Columbia. Her research focuses on the impact of social dynamics on the activity of the stress response systems, which are known to be affected by the quality of the parent–child relationship.