Investing Like My Parents: Do Parents Affect Children’s Risk Taking Behavior?

59 Pages Posted: 26 Oct 2021 Last revised: 7 Dec 2021

See all articles by Ziwei Zhao

Ziwei Zhao

University of Lausanne; Swiss Finance Institute

Min Cui

T. Rowe Price

Date Written: October 25, 2021


We find that learning from parents explains heterogeneity in financial decisions later in life. Using parents’ stock market experiences before parenthood as instrumental variables for parents’ risk-taking, we show that parents’ risk-taking positively affects children’s stock market decisions. More importantly, exploiting a finding that parents spend more quality time with their first child, we find that this parental effect is mainly driven by learning from parents through one’s childhood interactions with parents. We also examine the wealth outcomes implied. Our results contribute to the understanding of how family traits passed down over generations could lead to wealth inequality across families.

Suggested Citation

Zhao, Ziwei and Cui, Min, Investing Like My Parents: Do Parents Affect Children’s Risk Taking Behavior? (October 25, 2021). Proceedings of Paris December 2021 Finance Meeting EUROFIDAI - ESSEC, Available at SSRN: or

Ziwei Zhao (Contact Author)

University of Lausanne ( email )

Quartier Chambronne
Lausanne, Vaud CH-1015

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4

Min Cui

T. Rowe Price ( email )

Baltimore, MD 21297-1215
United States

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