The gender of wealth accumulation: Gender differences in risky portfolio choices and their determinants

While financialization and rising inequalities are often regarded as challenges for fiscal redistribution policies, the role of monetary policy and financial markets is neglected. Although heterodox scholars are drawing attention to the distributional impacts of monetary policy, they are rarely related to dimensions of gender inequality. Indeed, monetary policy may contribute to the gender wealth gap via its effects on asset prices and interest rates should men and women systematically differ in their individual portfolio composition. Hence, I assess the following research question: Are there significant differences in portfolio choices between men and women in the United States of America in 2022? If so, what are the drivers of these differences? I employ the 2022 data wave of the Survey of Consumer Finances. Based on 1,690 observations of single male and female households, I apply a two-stage Heckman selection model. I find that single men are not only more likely to hold stocks in their financial portfolio, but also hold relatively larger amounts thereof compared to single women. These differences in portfolio choices are further driven by diverging financial means and risk preferences between men and women. However, significant gender differences are not robust to the inclusion of other risky financial assets and the households' position as net debtors. Overall, rather than biologically determining risk preferences, this paper suggests that gender is an expression of a diverging male and female socioeconomic status.