Stock Market Participation: The Role Of Human Capital

Kartik Athreya, Felicia Ionescu and Urvi Neelakantan

Working Papers from Centre for Advanced Financial Research and Learning (CAFRAL)

Abstract: Human capital investment is significant for most individuals, while stock market participation is limited, especially early in life. Returns to human capital depend on individual traits and will, for some, dominate returns to stocks. We demonstrate that heterogeneity in human capital returns, when empirically disciplined, explains well why many do not invest in stocks, especially when young. Our results also suggest that it is short sales constraints on stocks, and not borrowing constraints, that limit engagement with the stock market.

Keywords: Financial Portfolios; Human Capital Investment; Life-cycle (search for similar items in EconPapers)
JEL-codes: E21 G11 J24 (search for similar items in EconPapers)
Pages: 62
Date: 2018-08
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Published in Review of Economic Dynamics

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Related works:
Journal Article: Stock Market Participation: The Role of Human Capital (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:cafral:022316

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