Research
Main Working Papers
Spouses in The Same Boat: Labor Income Risk and Intra-household Risk Sharing (Job Market Paper) [SSRN]
Presentation: AsianFA Annual Meeting (2024), Singapore Rising Scholars Conference (2024), Central University of Finance and Economics (2024), AFA PhD Poster Session (2024), FMA Doctoral Consortium (2023), CUHK (2023)
Best Paper Award, Singapore Rising Scholars Conference, 2024
Abstract: This paper proposes a novel channel for households’ choices of risky asset allocation: more intra-household risk sharing reduces labor income risk for dual-earner couples, thus encouraging households’ financial risk-taking. Capturing intra-household risk sharing by conditional income correlation between spouses’ industries, I find that more income risk sharing within couples increases households’ financial risk-taking. Using unexpected events of spousal death, I causally identify the impact of intra-household risk sharing on households’ portfolio choices. My study implies an unintended consequence of positive assortative mating for wealth inequality by discouraging disadvantaged households’ financial risk-taking.
Scared Away: Credit Demand Response to Expected Motherhood Penalty in the Labor Market (with Darwin Choi, Zhenyu Gao, Tian Li, and Wenlan Qian) [SSRN]
Presentation: CEPR European Conference on Household Finance (2024)*, Peking University School of Economics (2024), Peking University HSBC Business School (2023)*, Peking University National School of Development (2023)*, Tsinghua University PBCSF (2023)*, HKUST (2023)*, Zhejiang University (2023)*, EFA Annual Meeting (2023), Central University of Finance and Economics (2023)*, China Business Research Network Workshop (2023)*, Asia-Pacific Corporate Finance Online Workshop (2023)*, NTHU Symposium on Sustainable Finance and Economics (2023)*, CUHK (2022)
Abstract: We exploit a policy reform that exogenously deteriorates mothers' job prospects. China switched from a one-child policy to two-child in 2016, which increased female workers' childbearing and caring responsibilities. Using a leading peer-to-peer lending platform targeting college students in China, we find that loan applications from female college students decrease by 15.6% relative to male students after the reform. The drop suggests that female students can anticipate the poorer future job prospects; they reduce their borrowing and invest less in human capital accordingly. Applications for long-term and large-amount loans and loans for human capital investment purposes experience the largest decline. We also find that loan applications decrease after provincial governments' staggered extension of maternity leaves and that the decrease is more prominent when the expected motherhood penalty is greater. The results are unlikely driven by credit supply channels.
Climate Change and Households' Risk-Taking (with Zhenyu Gao and Chanik Jo) [SSRN]
Presentation: CFRC (2024), CICF (2024), SGFIN Annual Research Conference on Sustainability (2024)*, KAFA-KFMA-KAFE (2023)*, SIPP Virtual Conference (2023)*, AFBC (2022), KAFA (2022)*, NTHU Symposium on Sustainable Finance and Economics (2022)*, CUHK (2022)
Abstract: This paper studies a novel channel through which climate risks affect households’ choices of risky asset allocation: a stringent climate change regulation elevates labor income risk for households employed by high-emission industries which in turn discourages households' financial risk-taking. Using staggered adoptions of climate change action plans across states, we find that climate change action plans lead to a reduction in the share of risky assets by 15% for households in high-emission industries. We also find a reduction in risky asset holdings after the stringent EPA regulation. These results are stronger with experiences of climate change-related disasters. Our study implies an unintended consequence of climate regulations for wealth inequality by discouraging low-wealth households' financial risk-taking.
*Asterisks indicate presentations by coauthor(s).
Other Publications
Chinese Consumption Shocks and U.S. Equity Returns (with Kiryoung Lee and Minki Kim), 2024, International Review of Economics & Finance, Volume 96, Part A, 103511