May 18, 2022

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For a child going to kindergarten or starting elementary school for the first time, the first day of classes can be scary. To ease the transition, parents often take the day off to accompany their kids to school. Usually, it is the mother. 


However, as women increasingly participate in the work force, new research conducted at the Business School of the Hebrew University of Jerusalem (HUJI) has found that their absence on the first day of school is palpably felt in stock markets around the world. Their absence shows up in lower trading volumes when compared with market activity on other school days. 


In addition, in countries with laws prohibiting gender discrimination governing hiring, the decrease in market activity on the first day of school is more pronounced than those with more traditional societies.


This research study, published in the Journal of International Financial Markets, Institutions and Money under the title “Stock markets and female participation in the labor force,” was conducted by Zvi Wiener, former dean of the Business School and a professor of banking and risk management at the HUJI, along with colleagues Dr. Menachem Abudy of Bar-Ilan University (BIU) in Ramat Gan (near Tel Aviv) and Yevgeny Mugerman of HUJI. 


The team surveyed 607 participants from 32 countries regarding their gender, education level, parental status and whether they accompanied their child on the first day of school.  They then collected figures from the World Bank on female labor force participation in each of those 32 countries, as well as their trading volumes on their first day of school, which often coincides with the beginning of the trading week. They then compared these figures with similar data points from 1968-2017. “By isolating and cross-referencing these data points we were able to see the effect of working women on trading volumes by paying close attention to what happens to market activity when those women are absent,” Wiener explained. 


“Our main findings document a significant societal phenomenon with a profound effect on stock markets, and specifically on the quality of the information environment, and they therefore merit further attention,” the researchers wrote. 


They found that in 2018, there was no gender difference in terms of who accompanies their child on the first day of kindergarten or first grade – two thirds of both male and female respondents (67%) said they take off time from work to accompany their child, rather than outsource this activity to others. “Our survey supports our assumption that both parents consider the first day of school an important event of their nuclear family,” Wiener noted.


But since many mothers now work outside the home, their absence is felt more deeply than it was in 1968 when fewer mothers did so.  In fact, 72% of the countries surveyed reported a lower trading volume on the first day of school, with an average decrease of 12% in market activity.  The lower trading volumes were seen even when the first day of school coincided with Mondays, traditionally a slow trading day.  


“Back in the 1960s and 1970s, there were fewer working mothers, so their impact on volume trading on any given day was less pronounced.  However, as women expand their place in the job market, their impact on the larger economy is significant,” said Wiener. 


The motivation for this study was rooted in the growing interest in the association between social considerations and stock markets, the authors explained.  “By focusing on the first day of school, we were able to pinpoint that the decrease in trading volume is related to the level of female workforce participation,” Wiener explained.  


“The fact that trading volumes were negatively affected, particularly in countries with legislated gender non-discrimination laws that govern hiring practices, actually shows the extent to which gender equality has been largely successful in those societies,” Wiener concluded.