The Effect of Education on Equity Holdings
33 Pages Posted: 22 Mar 2010
There are 2 versions of this paper
The Effect of Education on Equity Holdings
Date Written: March 10, 2010
Abstract
We study the effect of education on equity ownership in the form of stocks or mutual funds (outside of retirement accounts). Using data from the Panel Study of Income Dynamics, we find a causal effect of education on stockholding using the number of colleges in the county where the respondent grew up as an instrument. The effect is particularly strong for whites from non-privileged backgrounds. We explore the channels through which education affects equity holdings using the Wisconsin Longitudinal Survey and find that, controlling for family fixed effects, gaining a white-collar job appears to be the main channel.
Keywords: portfolio choice, college openings
JEL Classification: G11
Suggested Citation: Suggested Citation
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