• Chart of the Week
  • July 11, 2018

Equity investments

Wayhome Studio

Investing in stocks is no longer a game played only by the wealthy. Equity investments have become an important part of household finances for many middle-class households, too.

But stock market participation varies widely from country to country, and that variation may have something to do with cultural attitudes about gender, according to a paper in AEA Papers and Proceedings.

Researcher Da Ke, of the University of South Carolina, says that countries with more traditional gender norms tend to have lower levels of household investment in the stock market. These traditional attitudes constrain women’s influence over household financial decisions, even if they are more financially sophisticated, Ke says.

 

Figure 1 from Ke (2018)

 
The figure above plots stock market participation across a number of countries relative to their gender role attitudes, which are measured using the World Values and European Values surveys. Direct participation in the stock market is highest for many Nordic countries and others, including the United States and Australia, with more egalitarian views of gender roles. Countries with traditional attitudes like India and Turkey have the lowest participation.
 
Ke says these traditional gender norms have important economic consequences. If Turkey had the same gender norms as Germany, for example, stock market participation would increase more than tenfold.