News

Individuals who were exposed to the Finnish Great Depression invest more cautiously

This effect can be seen in financial decision-making 15 years later, even if the depression did not have a direct impact on the individual's wealth.
laskin_en.jpg

Researchers from Aalto University School of Business and BI Norwegian Business School examined the effect that the Finnish Great Depression of the early 1990s had on individual investment behaviour.

The study showed that people who experienced a significant increase in unemployment in their profession or region were less likely to invest in risky stocks and equity funds in 2005. The recession decreased propensity to invest in risky securities, even in cases when the depression had not directly decreased the investor's wealth.

Unemployment experienced by family members and neighbours also had a similar effect on investment decision-making.

'A surprising wave of unemployment in an individual's immediate circle still affected risk-taking 15 years later, and this impact was transferred from one generation to another,' says Assistant Professor Elias Rantapuska as he explains the research results.

The target of the study was Finns in the workforce who were born in 1950–1965. The research was performed by analysing data from Statistics Finland and the Finnish Tax Administration.

The study was co-authored with Professor Samuli Knüpfer from BI Norwegian Business School and Research Fellow Matti Sarvimäki from Aalto University School of Business and VATT Institute for Economic Research.

The study has been accepted for publication in the prestigious Journal of Finance. The article

Further information:

Assistant Professor Elias Rantapuska
Tel. +358 40 353 8419
[email protected]

Aalto University School of Business

 

  • Published:
  • Updated:
Share
URL copied!

Read more news

Havainnekuva rintasyöpäsoluista mikroskoopissa
Press releases Published:

Breast cancer cells use forces to open up channels through tissue

A new method reveals that cancer cells can spread by rapidly applying forces to tissue material.
Tuoleja ravintolatilassa, taustalla asiakaspalvelutilanne
Press releases Published:

New technologies can help people make sustainable dietary decisions

Blockchain-backed app provides information about food impacts and combined customer choice
An illustration with a graph on the left and a molecular structure inset in a cube on the right. Each curve on the graph is a different colour, and each is connected by a line to an inset circle with a specific molecular feature corresponding to that curve. Above the cube with the molecular structure is a squigly arrow coming in, labelled "hv", and a straight arrow going out, labelled "e-". The entire figure (graph and inset cube) is labelled "XPS".
Press releases Published:

Machine learning gives material science researchers a peek at the answer key

A model trained to predict spectroscopic profiles helps to decipher the structure of materials
A schematic showing two circular light waves coming from the left, passing through a square representing the modulator, and emerging as a single linear light beam.
Press releases Published:

The handedness of light holds the key to better optical control

A new optical modulator could boost the performance of optical technologies in domains from communication to computing