Research
Main Working Papers
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)*, PKU School of Economics (2024), PKU HSBC Business School (2023)*, PKU National School of Development (2023)*, THU PBCSF (2023)*, HKUST (2023)*, Zhejiang University (2023)*, EFA (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.
Safe Jobs, Risky Investments: Employment Protection and Household Portfolio Choices (with Changhyun Ahn and Chanik Jo) [SSRN]
Presentation: The 18th NYCU International Finance Conference (2024, scheduled)*, Indian School of Business (2024)*, NTU (2024)*, FMA Asia/Pacific (2024)*, Labor and Finance Conference (2023)*, UNSW (2023)*, UYSD (2023)*, UTS (2023)*, SIPP Virtual Conference (2023)*, EFA (2020)*, NFA (2020)*, MFA (2020)*, SFA (2020)*, SWFA (2020)*, University of Toronto (2020)*, CUHK (2020)*
FMA Asia/Pacific Best Paper Award (Asset pricing/Investment), 2024; Shinhan Bank & KAFA Best Paper Award, 2023
Abstract: By leveraging US state-level employment protection laws, we provide evidence that such laws increase stock market participation, on both intensive and extensive margins. Young, low-income, low-wealth, and less-educated households exhibit stronger effects. Conversely, when the protection law is reversed, we observe the opposite risk-taking behaviors. Our findings remain robust across various stock market participation measures, datasets, and stacked difference-in-differences research designs, underscoring the significance of employment protection in encouraging households to take financial risks, and potentially enhancing wealth accumulation. This represents a novel economic channel through which employment protection can benefit households.
Climate Change and Households' Risk-Taking (with Zhenyu Gao and Chanik Jo) [SSRN]
Presentation: Finance Down Under (2025, scheduled)*, Sydney Banking and Financial Stability Conference (2024, scheduled)*, 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