This study aims to examine whether the decisions of employers to invest in risky assets are related to workplace characteristics such as the number of employees, types of industries, and retirement pension types. The study utilizes individual-level da...
This study aims to examine whether the decisions of employers to invest in risky assets are related to workplace characteristics such as the number of employees, types of industries, and retirement pension types. The study utilizes individual-level data from Individual Retirement Pension Plan (IRP), Defined Contribution Plan (DC), and firm IRP accounts that are self-managed by employers in the workplace. However, individual DB balance cannot be identified because Defined Benefit Plan (DB) accounts are managed by the firm in aggregate. The data was obtained from the Korean Statistical Information Service (KOSIS) for the period 2015 to 2020 through the authorized Microdata Integrated Service (MDIS). Previous literature has documented a peer effect in investing in risky assets, which appears strongly among investors who earn relatively higher disposable incomes and among males. The study finds that employers who work in large-sized and well-compensated firms are more likely to invest in risky assets, particularly male employers who are older, have longer work period, and work in industries requiring a high level of financial literacy. This result indirectly supports the peer effect in choosing risky assets in their retirement pension plan for employers. Interestingly, the study also finds that DB holders are less likely to invest in risky assets through their IRP accounts than DC or firm IRP holders. However, once they start investing in risky assets, the proportion of risky assets relative to the total balance is higher than others. Overall, this study provides comprehensive insights into the determinants of investing in risky assets by employers, utilizing individual-level data and workplace information.