Has Greater Stock Market Participation Increased Wealth Inequality in the US?

35 Pages Posted: 1 Jun 2005 Last revised: 19 Jan 2016

See all articles by Yannis Bilias

Yannis Bilias

Athens University of Economics and Business

Dimitris Georgarakos

European Central Bank (ECB) - Directorate General Research; Center for Financial Studies (CFS)

Michael Haliassos

Goethe University Frankfurt - House of Finance; Goethe University Frankfurt - Faculty of Economics and Business Administration; CEPR; NETSPAR

Multiple version iconThere are 2 versions of this paper

Date Written: October 31, 2015

Abstract

Is wider access to stockholding opportunities related to reduced wealth inequality, given that it creates challenges for small and less sophisticated investors? Counterfactual analysis is used to study the influence of changes in the US stockholder pool and economic environment, on the distribution of stock and net household wealth during a period of dramatic increase in stock market participation. We uncover substantial shifts in stockholder pool composition, favoring smaller holdings during the 1990s upswing but larger holdings around the burst of the Internet bubble. We find no evidence that widening access to stocks was associated with reduced net wealth inequality.

Keywords: Household finance, stockholding, financial literacy, wealth distribution

JEL Classification: G11, E21, E44

Suggested Citation

Bilias, Yannis and Georgarakos, Dimitris and Haliassos, Michael, Has Greater Stock Market Participation Increased Wealth Inequality in the US? (October 31, 2015). Available at SSRN: https://ssrn.com/abstract=731805 or http://dx.doi.org/10.2139/ssrn.731805

Yannis Bilias

Athens University of Economics and Business ( email )

76 Patission Street
Athens, 104 34
Greece

Dimitris Georgarakos

European Central Bank (ECB) - Directorate General Research ( email )

Sonnemannstrasse 20
Frankfurt am Main, 60314
Germany

Center for Financial Studies (CFS) ( email )

Gr├╝neburgplatz 1
Frankfurt am Main, 60323
Germany

Michael Haliassos (Contact Author)

Goethe University Frankfurt - House of Finance

Theodor-W.-Adorno-Platz 3
PF H32
Frankfurt am Main, 60323
Germany

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Theodor-W.-Adorno-Platz 3
PF H32
Frankfurt am Main, D-60323
Germany

CEPR

London
United Kingdom

NETSPAR ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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