Research

Parental Death and Stock Market Participation (Job Market Paper)

Early-life traumatic experience is a relevant predictor of household financial risk-taking. I show that parental death during childhood leads to lower stock market participation later in life. I provide evidence that this relationship is explained mainly by variations in cognitive abilities,  risk attitudes,  and financial distress,  which together result in 70% of the observed difference.  In contrast,  non-cognitive abilities and self-confidence do not appear to be the channels driving the gap in stock market participation.  Alternative family dynamics, such as the divorce of parents, and gender norms through the influence of the surviving parent, do not remove the effect of trauma on stock market participation. The trauma effect also persists across the wealth distribution and age groups. Results are indicative of the long-lasting effects of childhood adversity on financial decisions.

• Presented at 2024 FMA Europe Doctoral Consortium in Turin

Financial Pessimists and Green Attitudes

 Using microdata from a UK household survey, this paper examines the association between own financial expectation and green attitudes. I document that individuals with pessimistic view about their own financial future are more likely to oppose climate measures that affect their current lifestyle, and are less prepared to pay more for environmentally-friendly products. The effect is not extended to climate change beliefs, as financial pessimism is not associated with lower general concern with climate change. These results highlight how financial insecurity can undermine support to climate policies. Alternative explanations such as financial distress, unemployment, direct exposure to pollution and political preferences do not explain the results derived from financial expectations on green actions. An instrument variable (IV) analysis further endorse the empirical evidence. I present IV estimates of peer effects that exploits the share of unemployment among long-term friends. Overall, the results are consistent with financial pessimism activating short-termism behavior, which tend to exclude costly sustainable measures.

The Gender Gap in Savings of Entrepreneurs (with Gosia Ryduchowska and Moqi Xu)

We investigate the gender differences in saving rates of entrepreneurial households. We use microdata from households in the UK, where entrepreneurship is high relative to most developed countries.  We show female entrepreneurs have higher saving rates than all other working groups. We find empirical evidence that this relation arises from  female entrepreneurs savings upon entry into entrepreneurship. We also find that the presence of a business partner removes the gap. In addition, we find in quantile regressions that belonging to the bottom tercile of socioeconomic status is an important factor contributing to higher saving rates of self-employed women. We then examine the implications of the gap. Female entrepreneurs are on average richer than female workers. Despite more savings, female entrepreneurs are poorer than male ones. Household dynamics showing that female entrepreneurs are more likely to transfer money within the household compared to male entrepreneurs is one potential reason for their compromised ability to grow personal wealth.

Motherhood and financial risk taking

Using household finance survey data from 21 European countries, I investigate the determinants of single women being less likely to hold risky assets than single men. Single women also allocate a lower share of their financial portfolios to risky assets. Motherhood is an important predictor of the gap. Single mothers are 2% less likely to participate in the stock market relative to single women without children. Among single mothers with two or more children, the negative effect is at 3.3%. I argue that motherhood represents a background risk, in which women anticipate the risks of becoming a parent on labor force participation and career progression. Moreover, risk preferences and living in countries with traditional gender norms are confirmed as relevant factors. This paper also shows that the gender gap in portfolio allocation affects gender wealth inequality over the life-cycle.  Overall, this study provides new evidence of the gender investment gap and wealth inequalities associated with parenthood and gender norms. 

• Presented at BI Norwegian Business School (2020), EFMA Doctoral Student Seminar (2021), Insper (5th Meeting of the Society of Family and Gender Economics - 2024)