Work

Understanding the Effects of Marriage and Divorce on Financial Investments: the Role of Background Risk Sharing

Year: 2014

Type: article

Abstract: We investigate how changes in marital status affect financial investments and how these effects vary with background risk. We use detailed register‐based panel data and difference‐in‐differences estimators to benchmark common unobserved influences on financial investments. Women increase the fraction of wealth invested in stocks after marriage and decrease it after divorce, whereas men show the opposite behavior. Households whose joint labor income risk is reduced more by marriage have a higher increase in their exposure to risky assets in marriage. Thus income risk sharing in the household is important for financial risk taking and investment responses to marital transitions. (JEL G11, J12, J16, D14)

Source: Economic Inquiry

DOI: 10.1111/ecin.12113

Authors: Charlotte Christiansen, Juanna Schröter Joensen, Jesper Rangvid

Institutions: Aarhus University, Stockholm School of Economics, Copenhagen Business School

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W3125857708

FWCI: 15.59

Cites: 48

Cited by: 56

Related to: 10