Early life conditions and financial risk-taking in older age

Christelis, D. , Dobrescu, L. I. and Motta, A. (2020) Early life conditions and financial risk-taking in older age. Journal of the Economics of Ageing, 17, 100266. (doi: 10.1016/j.jeoa.2020.100266)

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Abstract

Using life-history survey data from 11 European countries, we investigate whether childhood conditions – such as socioeconomic status, cognitive abilities and health problems – influence portfolio choice, including homeownership, and risk attitudes later in life. After accounting for the corresponding conditions in adulthood, we find that both higher childhood socioeconomic status and cognition (especially mathematical ability) are strongly and positively associated with owning risky financial assets, a house, as well as with one’s willingness to take financial risks. In stark contrast, having had health problems in early life negatively affects only homeownership in older age. Finally, favorable childhood conditions are also positively associated with the transition in and out of risky asset ownership several decades later, both by facilitating investing and making divesting less likely.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Christelis, Dr Dimitris
Creator Roles:
Christelis, D.Conceptualization, Methodology, Software, Writing – original draft, Writing – review and editing
Authors: Christelis, D., Dobrescu, L. I., and Motta, A.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Journal of the Economics of Ageing
Publisher:Elsevier
ISSN:2212-828X
ISSN (Online):2212-8298
Published Online:18 July 2020
Copyright Holders:Copyright © 2020 Elsevier B.V.
First Published:First published in Journal of the Economics of Ageing 17:100266
Publisher Policy:Reproduced in accordance with the publisher copyright policy

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