Ongoing Research

How Gender Role Attitudes Shape Maternal Labor Supply | Tim Mensinger

Abstract | Working Paper | Interview We examine the influence of gender role attitudes, specifically views about the appropriate role of mothers, on post-childbirth employment decisions. German panel data reveals that mothers with traditional attitudes are 15% less likely to work during early motherhood than their egalitarian counterparts. Differences also emerge at the intensive margin and are persistent for at least seven years. Fathers' attitudes also predict maternal labor supply, highlighting joint decision-making within couples. Examining the interaction of attitudes with policies, we find that the introduction of a cash-for-care payment for parents who abstain from using public childcare substantially reduced the labor supply of traditional mothers, whereas egalitarian mothers' labor supply remained unaffected. To examine counterfactual policy changes, we estimate a dynamic model of female labor supply that incorporates human capital accumulation and, as a novel feature, heterogeneity by gender attitudes. Labor supply elasticities are substantially larger for traditional mothers, while a policy facilitating full-time childcare access has a more pronounced effect on egalitarian mothers. Our findings stress that gender role attitudes moderate the impact of policies, which implies that measured average policy effects depend on the distribution of attitudes and, hence, cannot easily be transferred over time or to other countries.

How Has the Increase in Work from Home Impacted the Parental Division of Labor? | Hans-Martin von Gaudecker, Radost Holler, and Lenard Simon

Abstract | Working Paper | Coverage: Wirtschaftswoche 23, 2023 In this study, we analyze how the parents of young children react to the change in working conditions during the COVID-19 pandemic using representative panel data from the Netherlands spanning four waves from 2019 to 2021. We find that over the course of the pandemic, fathers increase childcare hours leading to a more egalitarian division of childcare between parents. We show that this change can be fully accounted for by fathers gaining asymmetrically more temporal flexibility through the shift to remote work accelerated by the pandemic. Additionally, we find evidence that mothers whose spouse have remote work possibilities increased their working hours over the course of the pandemic. Our results provide evidence that part of the unequal division of labor within families with respect to market and non-market work is driven by an asymmetric distribution of temporal flexibility. This asymmetry can be the result of joint household optimization when temporal flexibility in jobs is necessary for childcare provision but punished in terms of remuneration.

Proud to Not Own Stocks: How Identity Shapes Financial Decisions | Luca Henkel

Abstract | Working Paper This paper introduces a key factor influencing households' decision to invest in the stock market: how people view stockholders. Using surveys we conducted with nearly 8,500 individuals from eleven countries, we document that a large majority of respondents view stockholders negatively -- they are perceived as greedy, gambler-like, and selfish individuals. We then provide experimental evidence that such perceptions of identity-relevant characteristics causally influence decision-making: if people view stockholders more negatively, they are less likely to choose stock-related investments. Furthermore, by linking survey and administrative data, we show that negative perceptions strongly predict households' stock market participation, more so than leading alternative determinants. Our findings provide a novel explanation for the puzzlingly low stock market participation rates around the world, new perspectives on the malleability of financial decision-making, and evidence for the importance of identity in economic decision-making.

The Distribution of Ambiguity Attitudes | Hans-Martin von Gaudecker and Axel Wogrolly

Abstract | Working Paper | Online Appendix | Replication Package This paper analyzes the stability and distribution of ambiguity attitudes using a broad population sample. Using high-powered incentives, we collected six waves of data on ambiguity attitudes about financial markets---our main application---and climate change. Estimating a structural stochastic choice model, we obtain three individual-level parameters: Ambiguity aversion, likelihood insensitivity, and the magnitude of decision errors. These parameters are very heterogeneous in the population. At the same time, they are stable over time and largely stable across domains. We summarize heterogeneity in these three dimensions using a discrete classification approach with four types. Each group makes up 20-30% of the sample. One group comes close to the behavior of expected utility maximizers. Two types are characterized by high likelihood insensitivity; one of them is ambiguity averse and the other ambiguity seeking. Members of the final group have large error parameters; robust conclusions about their ambiguity attitudes are difficult. Observed characteristics vary between groups in plausible ways. Ambiguity types predict risky asset holdings in the expected fashion, even after controlling for many covariates.

Beliefs and Portfolio Choice in a Representative Population

Abstract | Working Paper | Policy Outreach Video The amount of risk that households take when investing their savings has long-term consequences for their financial well-being. However, a substantial share of observed heterogeneity in financial risk-taking remains unexplained by factors like risk aversion and wealth levels. This study explores whether subjective beliefs about stock market returns can close this knowledge gap. I make use of a unique data set that comprises incentivized, repeated elicitations of stock market beliefs and high-quality administrative asset data for a probability-based population sample. Households with more optimistic stock market expectations hold more risk in their portfolio, where the effect size is about half of the effect size of risk aversion. Furthermore, changes in expectations over time are related to changes in portfolio risk, which demonstrates that cross-sectional correlations are not driven by a time-invariant third variable. The results suggest that stock market expectations are an important component of portfolio choice. More generally, the study shows that subjective beliefs can be reliably measured in surveys and are related to actual high-stakes decisions.