Early life conditions and financial risk–taking in older age : [Version September 28, 2011]

Using life-history survey data from eleven European countries, we investigate whether childhood conditions, such as socioeconomic status, cognitive abilities and health problems influence portfolio choice and risk attitu
Using life-history survey data from eleven European countries, we investigate whether childhood conditions, such as socioeconomic status, cognitive abilities and health problems influence portfolio choice and risk attitudes later in life. After controlling for the corresponding conditions in adulthood, we find that superior cognitive skills in childhood (especially mathematical abilities) are positively associated with stock and mutual fund ownership. Childhood socioeconomic status, as indicated by the number of rooms and by having at least some books in the house during childhood, is also positively associated with the ownership of stocks, mutual funds and individual retirement accounts, as well as with the willingness to take financial risks. On the other hand, less risky assets like bonds are not affected by early childhood conditions. We find only weak effects of childhood health problems on portfolio choice in adulthood. Finally, favorable childhood conditions affect the transition in and out of risky asset ownership, both by making divesting less likely and by facilitating investing (i.e., transitioning from non-ownership to ownership).
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Metadaten
Author:Dimitris Christelis, Loretti I. Dobrescu, Alberto Motta
URN:urn:nbn:de:hebis:30:3-241128
Parent Title (German):CFS working paper series ; 2011, 28
Series (Serial Number):CFS working paper series (2011, 28)
Publisher:Goethe-Univ., House of Finance, Center for Financial Studies
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2011
Year of first Publication:2011
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2012/02/07
Tag:Childhood; Cognition; Financial Risk; Health; Portfolio Choice; Socioeconomic Status
Issue:September 28, 2011
Pagenumber:44
HeBIS PPN:31219966X
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:332 Finanzwirtschaft
JEL-Classification:C23 Models with Panel Data
C25 Discrete Regression and Qualitative Choice Models; Discrete Regressors (Updated!)
D14 Personal Finance
E21 Consumption; Saving; Wealth
J13 Fertility; Family Planning; Child Care; Children; Youth
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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