Risk attitude and capital market participation: is there a gender gap in Germany?

52 Pages Posted: 18 May 2021

See all articles by Jan-Christian Fey

Jan-Christian Fey

University of St. Gallen

Oliver Lerbs

University of Muenster

Carolin Schmidt

University of Cambridge - Department of Land Economy; ZEW – Leibniz Centre for European Economic Research

Martin Weber

University of Mannheim - Department of Banking and Finance

Date Written: May 17, 2021

Abstract

Do women invest differently than men? Using the Deutsche Bundesbank Panel on Household Finances (PHF), we replicate earlier findings that participation in stocks and the conditional share held in equity are generally lower among women than among men, even when we account for risk aversion and other relevant factors. Above and beyond most previous literature, we also analyse financial wealth held in fund shares, fixed-income securities and certificates. Adjusted for controls, women hold less wealth in certificates but more in fund shares than men. We also report novel results when we decompose the raw gender gap in capital market participation rates. This gap is mainly explained by different risk attitudes and monetary endowments, but women would participate even less in the capital market if they reacted to risk aversion in the same way as their male counterparts, implying that risk-averse men may shy away from risky assets much more than similar women.

Keywords: Capital market participation, gender, risk attitude, risky assets

JEL Classification: G51, G41, G11, J16

Suggested Citation

Fey, Jan-Christian and Lerbs, Oliver and Schmidt, Carolin and Weber, Martin, Risk attitude and capital market participation: is there a gender gap in Germany? (May 17, 2021). Available at SSRN: https://ssrn.com/abstract=3847935 or http://dx.doi.org/10.2139/ssrn.3847935

Jan-Christian Fey

University of St. Gallen ( email )

Bodanstrasse 8
SIAW-HSG
St.Gallen, 9000
Switzerland

Oliver Lerbs

University of Muenster ( email )

Schlossplatz 2
Muenster, D-48149
Germany

Carolin Schmidt (Contact Author)

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

HOME PAGE: http://www.carolinschmidt.de

Martin Weber

University of Mannheim - Department of Banking and Finance ( email )

D-68131 Mannheim
Germany
+49 621 181 1532 (Phone)
+49 621 181 1534 (Fax)

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