This paper examines cross-country differences in the relationship between traumatic experience in childhood and household stock market participation. We find that US households that experience the death of a parent during childhood are less likely to participate in the stock market. Conversely, experiencing parental death in childhood does not affect stockholdings in China. Further analyses show that the results can be partially explained by the cultural differences between the two countries. Specifically, due to China's emphasis on collectivistic values, Chinese bereaved children are less sensitive to traumatic experience and more likely to receive financial support from in-group members that can "cushion" the adverse impact of parental death. We obtain similar conclusions out-of-sample when extending the analyses to Korean versus English households as well as to other European countries. Overall, our paper highlights novel interactions between personal experience and the cultural environment in shaping financial decision-making behavior.

Using the staggered adoption of paid sick leave (PSL) mandates across US states, we document a 20% increase in the average household stock market participation following the enactment of a PSL policy. The effects are more pronounced among households facing greater health concerns, higher employment risks, and deeper financial vulnerabilities. Several mechanisms can explain our findings. PSL mandates offer households insurance-like protection, increase their income and wealth, and improve households' future outlook. Our findings demonstrate that PSL laws create positive economic externalities by motivating households to invest in risky assets, a key factor toward building wealth.

Using loan-level data from the U.S. Small Business Administration's 7(a) program, we examine whether lenders incorporate biodiversity risk into credit decisions. We focus on biodiversity dependency risk (the extent to which firms rely on ecosystem services) and biodiversity impact risk (the extent to which firms negatively affect biodiversity). Dependency risk is consistently associated with higher interest rates, more frequent securitization, and lower credit availability. In contrast, impact risk influences loan pricing only in recent years, following global initiatives such as the Paris Agreement and the Kunming-Montreal Framework. The effect of impact risk is stronger in politically progressive states and areas with greater regulatory exposure. Our findings suggest that dependency risk represents credit risk for lenders, whereas impact risk is associated with growing reputational and litigation risk linked to lending to firms with negative biodiversity impact.

Mental health issues have become a common global health problem. This paper uses a novel dataset to examine the causal effect of mental health issues on household risky financial decisions. I document a significantly negative effect of mental health issues on household investments in risky assets, suggesting that depressed households and households with cognitive limitation tend to hedge their poor mental health status by increasing investments in safer portfolios. To establish causality, I employ a novel and plausibly exogenous instrumental variable. Additional analyses suggest that the effects of depression on risky investments are more salient among older and married households. Overall, this study offers important insights to policymakers that improving citizens’ mental health could promote their financial market participation rate, which could lead to economic growth in the long-run.