Hormonal careers

The testosterone balance determines how happily women make risky financial decisions – the hormone often also determines the career path

Why do you see so many men on the trading floor, why is every successful female fund manager an admired exception?? Why do women put their money in savings accounts while their partners gamble away the family fortune with shares?? Is it because, as Eva Herman thinks, women have a natural sense of protection that they want to preserve and balance?? Or is it simply the influence of hormones that determines the path we take in life?? Anyone who raises a pubescent daughter like the author thinks he knows quite well: It’s the hormones.

When it comes to money, the "male" sex hormone testosterone obviously plays an important role. Testosterone is produced by both the male and female organism, but to a much greater extent in the male. Its effect is twofold: firstly, it changes structures during the maturation of the organism, and secondly, it influences the behavior of the finished individual. In the male body, the hormone is responsible, among other things, for the maturation of sperm cells, but also for the growth of hair all over the body – but not on the head.

Testosterone is said to have a number of other effects: It is supposed to reduce fear and to provide for more dominant behavior. It is also linked to inherently risky behaviors such as gambling addiction and alcohol abuse. Three U.S. researchers have now also investigated the role testosterone plays in the world of finance. In an article published in the Proceedings of the U.S. Academy of Sciences (PNAS), they describe their findings.

Here, researchers examined both the innate and current effects of a given level of testosterone on the organism. Among 500 MBA students at the University of Chicago, they first measured the ratio of the lengths of the index and ring fingers as an indicator of prenatal testosterone endowment – the smaller the ratio, the more testosterone the child was exposed to in utero. In addition, they analyzed actual saliva samples from all the test subjects for their hormone levels. This is how scientists wanted to better separate innate and current effects.

As comparative variables, the researchers chose the individuals’ willingness to take risks as well as their empathy potential. They determined the former using a computer game in which participants had to choose between a low but guaranteed amount and the potentially much higher proceeds of a risky lottery. Here, on average, men show a significantly higher willingness to take risks than women. For empathy assessment, a test developed by psychopathologist Simon Baron-Cohen (incidentally, a cousin of "Bruno" Sacha Baron Cohen) was used, in which the subjects had to fall on the state of mind from the eyes of a photo. Women perform better than men on average, and prenatal exposure to high levels of testosterone correlates with poor performance.

First, it was confirmed what was to be expected: men put more emphasis on risk than women, and they also had higher hormone levels in their saliva. However, no significant correlation between testosterone levels and risk-taking could be established for the male participants. However, the researchers found one for women: Female subjects with particularly high testosterone had less fear of risk. This does not have to be, the researchers warn, causal: The study also showed, for example, that married people were less willing to take risks than singles – perhaps that’s the third rough with which the other two are linked.

An interesting aspect resulted from the fact that the relation was very clear especially at low testosterone levels. Women and men with equally high hormonal influence should thus also show a similarly high willingness to take risks – which was indeed the case. However, the concentration of testosterone in men is significantly higher than in women – researchers believe that they have found one of the rare cases where biological differences between the sexes actually have a direct impact on career choice.

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