We examine the impact of the global trend towards trade protectionism on household stock market participation, focusing on the 2018–19 US-China trade war as an exogenous trade shock. We leverage cross-city variation in exposure to the trade war by combining industry-specific increases in US tariffs with variation in industry composition across cities. Using nationally representative household finance survey data collected around the trade war years, and a difference-in-differences design, results show that the onset of the trade war decreases the likelihood of households participating in the stock market and reduces the proportion of stocks in their portfolios. Further evidence reveals that these effects stem from the trade war's influence on decreasing household income, increasing income volatility, fostering risk aversion, and promoting negative views or beliefs about the economy. Our findings suggest that reduced stock market participation is a pathway through which trade protectionism affects the financial system and the economy.

This study investigates the effects of unobserved earnings-related endowments on marital outcomes, focusing on potential gender differences. Using a less stringent, more plausible assumption that monozygotic twins share more similar endowments relative to dizygotic twins, we develop a novel identification strategy from the twins experiment. Using unique Chinese twins survey data, we find that men with genetic endowments related to higher earnings marry earlier and have younger, taller wives; such women marry later and have older husbands with higher education and income. Results cast doubt on the conventional assumption of independence between unobservables and observable marital attributes.

We analyze premarital investments in human capital and housing when individuals are unable to make binding commitments to share their labor income with a prospective spouse. Investments are distorted if there are gender differences in bargaining power over own labor income or marriage market imbalances. Distortions are magnified when ex ante bargaining power favors one sex (e.g., women in China) and ex post bargaining power favors the other (e.g., men in China), since parents of boys will increase housing investments in order to credibly commit to share more resources with the boy’s potential wife, possibly crowding out human capital investments.