Left Behind: Presidential Cycles and Partisan Gap in Stock Market Participation

42 Pages Posted: 4 Jun 2019 Last revised: 18 Jun 2020

See all articles by Da Ke

Da Ke

University of South Carolina - Department of Finance

Date Written: May 18, 2020

Abstract

Using longitudinal U.S. household data, I document that Democrats are less likely than Republicans to participate in the stock market. More importantly, the partisan gap in stock market participation widens sharply under Democratic presidencies, precisely when the stock market returns are substantially higher. This dynamic pattern accounts for more than 40 percent of the discrepancy in wealth accumulation between Democrats and Republicans over presidential cycles. Overall, these findings underscore the interplay between individual ideology, household portfolio choice, and changing economic and political landscape.

Keywords: wealth inequality, presidential cycle, stock market participation, ideology, portfolio choice

JEL Classification: D31, G40, G51

Suggested Citation

Ke, Da, Left Behind: Presidential Cycles and Partisan Gap in Stock Market Participation (May 18, 2020). Available at SSRN: https://ssrn.com/abstract=3384406 or http://dx.doi.org/10.2139/ssrn.3384406

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
118
Abstract Views
961
rank
267,358
PlumX Metrics