Parental financial socialization vs. financial education: disentangling their impacts on investment behavior and gender disparities

Using a nationally representative sample of the U.S. population, this study examines the associations of parental financial socialization and financial education with investment behavior, with special attention paid to gender differences. Probit regression and multivariate probit models are employed to analyze the relationships of the two channels with investment ownership and various investment choices, while the nonlinear Blinder-Oaxaca decomposition method estimates the relative importance of different characteristics in accounting for gender disparities. Three principal findings are revealed. First, both channels are positively associated with investment ownership and choices, and parental financial socialization demonstrates a stronger association. Second, the two channels operate independently rather than jointly in relation to investment ownership. Third, the gender differences in investment ownership, favoring males, arise primarily from differences in the endowment of characteristics. Findings support strengthening early parental financial socialization and formal financial education, and equalizing financial learning opportunities to narrow gender investment disparities.