Importance of social factors in explaining Japanese households' allocation of wealth to risky financial assets

Thesis

The aim of this thesis is to show how different socio-demographic groups in a society exhibit different investment propensities. Previous literature’s conceptual framework fails to expose these group-based investment differences, yet these differences have serious implications for people’s long-term wealth outcomes and wealth inequality. Across three substantive chapters, this thesis investigates the curious case of Japan, where many households have remained savers and non-investors, despite ultra-low interest rates, rapid financialisation and pro-investment government policies in recent decades. The first substantive chapter asks whether Japan’s privileged workers (large companies’ regular employees) are more likely to own stocks and funds compared to other workers and non-workers. Using nested logistic models and KHB (Karlson-Holm-Breen) decomposition, this chapter finds that while indirect effects attributable to investment predictors previously identified in economics literature (such as monetary resources and financial literacy) are confirmed, a larger residual direct effect is also identified. The second substantive chapter compares the investment propensities of married and single men and women, and finds that married men alone are more likely to own risky financial assets. The gender effect between women and married men is found to be fully mediated by factors such as financial literacy and employment type. The final substantive chapter fits fixed-effects models on longitudinal data to show that Japanese men are more likely to invest following marriage, but not Japanese women, supporting the pervasiveness of Japan’s male breadwinner model. Throughout all analyses, monetary factors only account for minor mediating effects, contributing to a re-conceptualisation of investment as both an economically-rational and social behaviour. Knowledge of Japan’s social and cultural context (regarding employment and gender inequalities) has guided accurate hypotheses about investment differences in this thesis, suggesting the likely usefulness of contextualised studies of group-based investment participations in other countries. For Japan, this thesis shows the far-reaching effects of labour market dualism and gendered division of labour, extending beyond incomes and pensions to affect even private wealth management.

Authors: Tsang, C

• DOI: 10.5287/ora-dqz1r5xza
• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: University of Oxford
• Language: English