Education of adult children and household financial asset allocation

Jianan Liu and Jijian Fan

Applied Economics Letters, 2025, vol. 32, issue 12, 1801-1807

Abstract: We examine how adult children’s education affects households’ financial asset allocation. Using data from the 2015 China Household Finance Survey (CHFS2015), an instrumental variable design finds that the increase in children’s educational attainment increases the market participation rate of low-risk assets such as demand deposits and time deposits, and the proportion of low-risk assets of their families increases significantly. These results stem from two effects brought about by the children quality improvement: the ‘savings effect’ that increases household’s investment ability, and the ‘insurance effect’ that decreases the preventive saving incentives.

Date: 2025
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DOI: 10.1080/13504851.2024.2327468

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