Gender Gap in Personal Bankruptcy Risks : Empirical Evidence from Singapore

Using a unique dataset that merges bankruptcy and motor events with personal data in Singapore, this study finds significant evidence of gender gap in personal bankruptcy risk. We show that the women' odds in bankruptcy events is 28% of the men's odds controlling for demographic, housing types and spatial fixed effects. The gender gap is not race-neutral. We find that the gender effect is stronger in Chinese's bankruptcy events, but weaker in Malay and Indian bankruptcy events, relative to the bankruptcy events in the control group (“other” race). The gender gap is also observed in multiple bankruptcy events and bankruptcy claim amounts. We use motor accident events as an instrument for risk-taking, and find similar evidence of the gender gap in bankruptcy events. Bankruptcy risks of debtors with past motor accident records are significantly higher than those without past motor accident records. The gender gap in bankruptcy risk has important implications for credit modelling and risk pricing in the finance and economic literature