The Impact Of Old-age Support On Household Financial Asset Allocation

The current unreasonable structure of household financial asset allocation in China is prominent,and the investment portfolio is single,which makes household financial asset allocation problems restrict household income growth in a new era.According to the data from Peking University’s 2018 CHARLS,the participation rate of household risk assets among middle-aged and elderly residents aged 45 to60 is only 5.5%,and risk assets account for only 2.3% of household financial assets.Under the long-term influence of Confucianism such as "raising children to prevent old age,accumulating grains and preventing hunger",many families in China have adopted their children to cope with future risk shocks,and are unwilling to allocate financial assets rationally to achieve the purpose of resisting uncertain risks.The rationalization of financial asset allocation is not only conducive to household income and wealth accumulation,but also promotes financial product innovation and the development of my country’s financial market.We found that most of the researches were based on the impact of the interviewee’s current situation.This article will start from the perspective of Old-age support based on life cycle theory,and explore its possible impact on household financial asset allocation.We selected CHARLS Database of Peking University and used probit and tobit model to demonstrate the hypothesis.The results show that economically independent respondents are more inclined to participate in the financial market and increasing the proportion of risky assets in financial assets.Through further division,it will be found that the expectation of relying mainly on pensions and other endowments has the most significant impact on the allocation of household financial assets.This shows that,compared to respondents who are expected to rely mainly on their children for the elderly,respondents who are relatively independent after retirement may be more willing to participate in the financial market due to their current relatively high incomes,adequate Old-age support plans,and relatively worry-free pensions.Next,this article uses the instrumental variable method and the substitution variable definition method to conduct a robustness test and finds that this empirical result is still significant.The innovation of this paper is that,the research on the influencing factors of household financial asset allocation has been extended from the "current" perspective to the "life cycle" perspective according to the life cycle theory.Taking the expectation of relying on children to provide for the elderly as a reference group,we will explore whether new Old-age support will increase the probability of households’ participation in the financial market compared to the traditional concept of “raising children to protect against the elderly” and enrich this field Research.