Can Access to Financial Markets Be an Important Option for Rural Families to Break the Return to Poverty Due to Illness in China?

Zeyang Sun and Xiaocang Xu ()
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Zeyang Sun: School of Economics and Business Administration, Heilongjiang University, Harbin 150080, China
Xiaocang Xu: School of Economics and Management, Huzhou University, Huzhou 313000, China

Agriculture, 2024, vol. 14, issue 2, 1-19

Abstract: Background: In China’s post-epidemic era, the income of rural households has decreased, and the function of property preservation and appreciation is expected to weaken, which gives the financial market an increasingly prominent role in blocking the barrier of poverty caused by disease. Method: Based on CHARLS data, this paper empirically explores the relationship between financial assets and health expenditure and catastrophic health expenditure (representing the incidence of return to poverty due to illness) to provide evidence for the development of financial markets to help stop the return to poverty due to illness and consolidate the achievements of poverty alleviation. Results: The results show that the influence of financial assets on the incidence of catastrophic health expenditures is significant and has a threshold effect. At the same time, financial assets have a greater impact than housing on preventing the return to poverty due to illness. Therefore, moving to the financial market can be a viable option for rural households to stop the return to poverty due to illness in the future. Policy suggestion: The government should standardize the development of the financial market and scientifically allocate financial resources to ensure the stable preservation and appreciation of household financial investment. Rural family members should actively improve personal financial literacy and reasonable planning of family assets to achieve stable preservation and appreciation of family financial investment.

Keywords: rural families; poverty; catastrophic health expenditures; financial assets; financial literacy (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2024
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