The Impact Of Child Structure On The Allocation Of Family Risky Financial Assets

With the deepening and development of reform and opening up,China’s economy has been developing rapidly.Financial reforms and financial deepening guided by policies have continued to drive the maturity of the financial market,providing more and better opportunities for residents’ household capital allocation.Household demographics,wealth consumption and product life cycles have a significant impact on the choice of household financial flows,and both domestic and international financial academics and empirical studies have focused on the area of household finance.This paper is the first to jointly set the gender of children and the number of minor children as the core explanatory variables to study households’ risky financial market participation from the perspective of their offspring structure,as household finance research in China is still at a relatively early stage.This paper firstly constructs a theoretical explanatory framework for the impact of risky financial asset allocation,and focuses on the empirical findings of the impact of child gender and child structure on household financial asset allocation.Next,the paper presents descriptive statistics on the sample data using data from the China Household Financial Survey(2019).The results show that China’s household savings rate is at a high level and risky financial market participation is low;the majority of household heads are male,with a high proportion of risk averse types,and a smaller proportion of household heads are financially literate and invest more cautiously.In the specific empirical study,this paper innovatively uses the gender of the firstborn child and the number of minor children together as the core explanatory variables,and the savings rate,the probability of holding risky financial assets and the proportion of holding risky financial assets as the explanatory variables,and conducts an empirical test with the help of OLS,probit and tobit models respectively,using Stata 16.0 software,to The impact of child composition on household risky financial asset allocation is outlined from three perspectives.On this basis,The baseline model was tested for endogeneity by introducing instrumental variables,and robustness tests were performed by substituting dependent and independent variables.regional heterogeneity tests are conducted using the East,Central and Western sub-samples,and gender house price interaction term,precautionary savings and parental wage income are introduced as mediating variables respectively to examine the "buying a house for children"mechanism,the precautionary savings mechanism and the "buying a house for children"mechanism."(1)Boys significantly increase the household savings rate and reduce the breadth and depth of household participation in risky financial markets through the"buying a house for children" mechanism,and this effect is most pronounced in the central region,where the preference for sons over daughters is strong.This effect is most pronounced in the central region,where the preference for sons is strong,followed by the eastern and western regions.(2)The number of minor children has a significant positive effect on the household savings rate and a significant dampening effect on the extent and depth of participation in risky financial markets,mainly through increasing household precautionary savings and reducing mothers’ wage income.The effect is most pronounced in the eastern region,where the cost of living is higher,followed by the western and central regions.(3)Household risky financial asset allocation is influenced by the gender of the household head,health status,financial literacy,risk preference,and whether or not the household is engaged in business and industry.Finally,integrating the empirical results of this paper and China’s current national conditions,this paper proposes measures from three aspects: national policies,financial institutions and resident households.