Three Essays on Investment Decisions, Pension Funds and Financial Markets

The thesis is composed by three papers. In the first chapter we provide an updated review of the empirical advances in this field of study, with particular focus on the effects that pension funds produce on labour markets, financial markets and economic growth. In the second chapter we tackle the issue of whether pension funds can influence stock market volatility. By using panel data of 34 OECD countries from 2000 to 2010, and various empirical models, it is revealed that there is significant reduction in volatility of stock prices when the investment of pension funds in stocks increases. The third chapter opens the second debate of what determines stock market participation of European individuals. Using different database and different econometric specifications, we were able to provide the precise accounts of the effects of such variables as financial literacy, human capital, and effectiveness of the education system and financial attractiveness of the markets on the probability to invest in the stock market, together with other socio-demographic individual characteristics.