A Study On The Intergenerational Transmission Impact Of Chinese Household Financial Assets Inequality

The holdings of financial assets in the household sector are an important part of the total financial assets of the country and also the main source of income for the residents.The growth and rational allocation of the total household financial assets will promote the rapid development of the national economy and will also promote the effective improvement of people's living standards.In recent years,with the rapid development of China's economy,the continuous improvement of financial markets and the substantial increase in the residents' income level,the degree of households participation in financial markets has gradually deepened.But at the same time,some problems including the unequal distribution of household financial assets and expansion of the property income gap have emerged.In this context,based on the statistical analysis of inequality in family financial assets,this paper studies the formation mechanism of family financial assets' inequality in the long run from the perspective of intergenerational transmission.It has a strong theoretical and practical significance for improving the total financial assets of low-income families and rural households,improving the financial asset allocation of households and narrowing the gap in property income.This paper makes an empirical study on the inequality of financial assets distribution and the mechanism of inequality forming in the long term in China by using two different types of Bewley models.On the one hand,unlike the classical economic model based on representative individuals and complete market hypothesis,in order to make the research results more realistic,this paper incorporates borrowing constraints and individual heterogeneity into the Indefinite boundary Bewley model and explains the formation of unequal distribution of household financial assets from the perspective of preventive savings motives.Further,by using the data related to family property in CFPS and taking 860 sample families as research objects,this paper makes a statistical test on the distribution of financial assets held by different families.On the other hand,this paper introduces the life cycle structure into the Bewley model of overlapping generation.It is believed in the paper that the accumulation of financial assets of the offspring family will be affected by the level of financial assets held by the parents and the unequal distribution of financial assets will be transmitted between generations.Based on this,by using the means of intergenerational transmission decomposition,this paper makes an empirical study on the formation mechanism of the financial asset inequality of Chinese households in the long term from two perspectives which are direct transmission of financial assets and the indirect transmission of human capital.The empirical results show that: 1.Cash and deposits are the main way of holding financial assets for all the sample households,which indicates that at the current stage,preventive saving is the main motivation for China's households to reserve financial assets.2.There are significant differences in the total amount of financial assets and the allocation structure between urban and rural families and the sample families of different subclasses.This means that the heterogeneity of the economic environment and the heterogeneity of the total asset level will result in an unequal distribution of household financial assets.3.The degree of unequal distribution of household financial assets is very serious.4.Overall,the holding amount of parent financial assets will have an impact on the reserve of offspring financial assets.In other words,the unequal distribution of household financial assets in China will be transmitted between generations.2.The decomposition results of intergenerational transmission show that the direct transmission of financial assets has greater impact on the accumulation of offspring financial assets than the indirect transmission of human capital.But the impact of human capital investment on the offsprin financial assets cannot be neglected.The contribution of this paper is mainly in three aspects: 1.This paper uses two kinds of Bewley models which are the infinite bound Bewley model and the generational overlapping Bewley model to study the unequal distribution of Chinese household financial assets from the perspective of intergenerational transmission and to a certain extent,it is a useful supplement to the theory of household financial assets selection behavior.2.The method of intergenerational transfer decomposition is used to examine impact of direct transmission of financial assets and indirect transmission of human capital on formation of offspring financial assets inequality.3.This paper empirically studies the formation mechanism of financial assets inequality in China's households by selecting families that participate in the CFPS survey from 2010 to 2016 as a research sample and integrating them into panel data.