Full Citation

Title: Till death (or divorce) do us part: Early-life family disruption and fund manager behavior

Citation Type: Working Paper

Publication Year: 2019

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Abstract: We show that early-life family disruption (death or divorce of a parent) causes fund managers to be more risk averse when they manage their own funds. Treated managers take lower systematic, idiosyncratic, and downside risk than non-treated managers. This effect is most pronounced for managers who experienced family disruption during their formative years or who had little social support. Treated managers invest less in lottery-like stocks, make smaller tracking errors, and bet less on factors during recessions, but do not perform worse than their untreated cohorts. Our evidence indicates that familial background affects economic decisions later in life even for finance professionals.

Url: https://www.cfr-cologne.de/download/workingpaper/cfr-19-01.pdf

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Authors: Betzer, André; Limbach, Peter; Rau, P Raghavendra; Schürmann, Henrik

Series Title: CFR Working Paper Series

Publication Number: 19-01

Institution: Center for Financial Research Cologne

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Data Collections: IPUMS USA

Topics: Family and Marriage

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