Left Behind: Partisan Identity and Wealth Inequality

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See all articles by Da Ke

Da Ke

University of South Carolina - Department of Finance

Date Written: May 8, 2019

Abstract

Using longitudinal household data, I document that Democrats are less likely than Republicans to invest in the stock market under Democratic presidencies, precisely when stock market return is substantially higher. This pattern contains even for college-educated and financially sophisticated individuals, and is best explained by their partisan identity. Moreover, the gap in stock market participation between Democrats and Republicans accounts for about half of their discrepancy in wealth accumulation over presidential cycles. A profound implication of these findings is that rising political polarization in the U.S. may be fueling wealth inequality.

Keywords: partisan identity, wealth inequality, presidential cycle, political polarization, stock market participation

JEL Classification: D31, G02, G11

Suggested Citation

Ke, Da, Left Behind: Partisan Identity and Wealth Inequality (May 8, 2019). Available at SSRN: https://ssrn.com/abstract=

Da Ke (Contact Author)

University of South Carolina - Department of Finance ( email )

1014 Greene Street
Columbia, SC 29208
United States

HOME PAGE: http://www.dakefinance.com

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