To risk or not: The impact of socioeconomic status on preschoolers’ risky decision‐making for gains and losses

Abstract Disparities in socioeconomic status (SES) may affect individuals’ risk preferences, which have important developmental consequences across the lifespan. Yet, previous research has shown inconsistent associations between SES and risky decision‐making, and little is known about how this link develops from a young age. The current research is among the first to examine how SES influences preschoolers’ risky decisions in both gain and loss frames. Across two studies, children aged 5 to 6 years (total N = 309, 154 boys) were asked to choose between certain and risky options. The risky option was more advantageous, equal to, or less advantageous than the certain option. Study 1 revealed that in the loss frame, high‐SES children ( n = 84, 44 boys) chose more risky options and were more sensitive to the expected value compared to low‐SES children ( n = 78, 42 boys), especially when the risk was more advantageous. However, this SES difference was not significant in the gain frame. Supporting the potential causal link between SES and risky decision‐making, Study 2 further found that experimentally increasing low‐SES children's ( n = 68, 30 boys) status by providing additional resources increased their risk‐seeking behavior in the loss frame. Overall, our findings suggest an interaction between environmental cues (gain vs. loss) and early life circumstances (SES) in shaping children's risk preferences. Research Highlights This research is among the first to examine how school backgrounds and experimentally manipulated SES influence preschoolers’ risk preferences in gain and loss frames. Children were more risk‐seeking for losses than for gains; this framing effect was stronger in higher‐SES than lower‐SES children. Lower‐SES children exhibited fewer risk‐seeking behaviors and decreased sensitivity to the expected value of options for losses, but not for gains. A temporary boost in SES increased children's risk‐seeking behavior, but not sensitivity to expected values.