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Childhood experience of father's job loss and stock market participation

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  • Lehtoranta, Antti

Abstract

Using data from the Panel Study of Income Dynamics (PSID), I document that childhood experience of father's job loss decreases the propensity to own stocks as an adult. If this experience takes place at the age of 5–10 years, the probability of owning stocks decreases by 2.9 percentage points in a sample with mean stock market participation rate of 17%. This finding is robust to alternative definitions of age ranges and controlling for random unobserved effects. I also find an effect of similar magnitude in the Health and Retirement Study (HRS) data.

Suggested Citation

  • Lehtoranta, Antti, 2014. "Childhood experience of father's job loss and stock market participation," Bank of Finland Research Discussion Papers 30/2014, Bank of Finland.
    • Handle: RePEc:zbw:bofrdp:rdp2014_030
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    More about this item

    Keywords

    stock market participation; personal experience; job loss;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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