Child education and parental financial outcomes: Evidence from a schooling reform

Shuang Yu, Manyi Wang and Yinhe Liang

Finance Research Letters, 2025, vol. 83, issue C

Abstract: This paper examines the causal impact of children’s schooling on their parents’ financial behaviors. Exploiting exogenous variation from the timing and geographic rollout of China’s 1986 Compulsory Education Laws, we estimate how increased educational attainment among children affects parental financial outcomes. Instrumental variable results show that children’s education significantly increases parental deposits, risk and nonrisk asset holdings, and the ratio of risk assets to annual income. Our mechanism analysis indicates that improvements in parental cognition, intergenerational support, social networks, and social security mediate these effects.

Keywords: Child education; Financial behavior; Compulsory education law (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325009183

DOI: 10.1016/j.frl.2025.107659

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