The Impact Of Educational Attainment On Household Financial Market Participation

The issue of household financial market participation is one of the important areas of microfinance research.Many scholars have studied how to enhance residents’ enthusiasm for investing in financial markets.Education,as an important way to enhance individuals’ knowledge and shape their risk attitudes and personality traits,also has a non-negligible impact on households’ financial market investment decisions.In this paper,we analyze how residents’ education level affects household financial market participation behavior in order to further understand residents’ investment behavior in financial markets.This paper provides a reference for improving residents’ financial market participation rate and promoting the healthy development of China’s financial market.This paper uses the university enrollment expansion policy to provide causal identification evidence for the participation of the family financial market affected by the education level.We complement the influence channels of education on family financial market participation from the perspective of non-cognitive ability,and comprehensively analyzes the influence mechanisms such as risk preference,cognitive ability and income.This paper mainly uses data from the 2018 China Household Tracking Survey.We construct break-point regression models in the context of the implementation of the college expansion policy in 1999.This paper empirically tests that the education level of the household head affects household financial market participation,and the results show that the higher the education level of the household head,the higher the probability of household participation in formal financial markets and the greater the share of formal financial assets held in total household financial assets.This paper conducts robustness checks by varying the explanatory variables,removing the sample of financial practitioners and propensity score matching method.Further,the paper divides the sample into different sub-samples in urban and rural areas,and in the East,Middle and West regions to explore the heterogeneous effects of education on household financial market participation.The results of the mechanism analysis in this paper show that increasing the number of years of education of individuals significantly increases individual risk preferences,enhances individual cognitive abilities and income,enhances openness perceptions in non-cognitive abilities,thus increasing the probability of household participation in financial markets and the size of formal financial asset holdings.In this paper,the evidence of the causal identification of family financial market participation is provided by the university enrollment expansion policy.And this paper proposes and tests the mechanism of non-cognitive ability.