Research On The Impact Of Human Capital On China's Urban Household Life Insurance Demand

Merton(2003)pointed out that from the perspective of personal risk management,considering the size of human capital,its volatility and the correlation between human capital and other assets is of great significance for personal asset allocation decisions.Therefore,in recent years,the research field of "household finance",many studies have divided the source of wealth of household into financial assets and human capital.The present value of household future dividend income is the value of financial assets.The present value of future labor income is the value of human capital.As one of the important sources of household income,labor income has an important impact on the asset allocation of household.Then,will human capital affect the household 's life insurance demand? If there is an impact,what kind of relationship exists between the two? Campbell(1980)argues that for most households,the uncertainty of labor income rather than the uncertainty of investment returns dominants the uncertainty of consumption,and the uncertainty of household labor income(human capital)is mainly derived from the wage earners' non-survival.Therefore,this problem can be solved by introducing a risk-solving mechanism,the insurance market.That is,by insuring life insurance,the human capital of the family can be protected,and the greater the value of the human capital of the household,the higher the amount of household life insurance should be purchased;this paper uses micro household data to find the appropriate human capital value and human capital risk metrics.Study the impact of human capital on household life insurance demand,thus providing theoretical guidance on household insurance life purchase and life insurance amount.Based on the 2013 data from China Household Finance Survey(CHFS),this paper empirically analyzes the impact of human capital value and human capital risk on household's life insurance demand by applying Probit model and Tobit model.The Probit model is used to analyze the impact of human capital on the probability of household life insurance purchase.The Tobit model is used to analyze the impact of human capital on the household life insurance premiums.And taking into account the sample selection bias,we use the Heckman model to re-estimate the family life insurance purchase decision process,and draw a more robust conclusion of the impact of human capital on life insurance premiums.The study found that the value of human capital can significantly increase the probability of household traditional insurance purchase and has no significant impact on household non-traditional life insurance purchase.The result supports the “Life Value Theory”.The volatility of labor income has a significant positive impact on household non-traditional and traditional life insurance.the positive correlation between the returns to human capital and the returns to market portfolio increase the demand for life insurance.This conclusion is contrary to the theory.At the same time,we find that household life insurance premiums have no obvious response to changes in household human capital values,but the risk of human capital has a significant positive impact on household life insurance premiums.