Research On The Impact Of Financial Assets On Income Mobility

With the continuous development of our country,the problem of unfair income distribution and unbalanced and insufficient economic development is becoming more and more serious,scholars generally believe that the low intra-generational income mobility will bring many unknown factors to the economic development of our country,there are some limitations to using only cross-sectional income data such as Keeny’s coefficient to describe income inequality,intra-generational income mobility refers to the change of the income rank of the same person or group of people in the same group in different periods.Using panel income data to measure the income mobility of residents or their families can truly reflect the real income inequality among families.With the continuous improvement of China’s financial market and the continuous improvement of household income,various financial products continue to emerge,and the types of financial assets that residents can invest in our country are becoming more and more abundant,the structure of household wealth has also changed a lot.Household income is no longer mainly determined by fixed wages,and property income,such as financial assets,accounts for an increasing proportion of household income,as a result,the impact on income inequality and intra-generational income mobility is becoming stronger,and the difference in the growth of household wealth brought about by financial assets can be explained by differences in household consumption and investment in education,thus further aggravating the inequality of income distribution.Therefore,it is important to clarify the impact of household financial assets on intra-generational income mobility to ensure the common prosperity of all people.Based on family finance theory,Marxism’s virtual capital theory,social mobility theory,and the life cycle theory of income mobility,this paper systematically analyzes the effects of holding financial assets on intra-generational income mobility,Based on the data of China’s household finance survey(CHFS)from 2011 to 2017,this paper constructs a family-level intra-generational income mobility index,and empirically analyzes the impact of holding financial assets on our intra-generational income mobility by using logit model.The research shows that the family financial assets can significantly affect the intragenerational income mobility of our family,and the results are still significant after distinguishing the direction of mobility,the conclusion is still valid after a series of robust tests,such as transformation regression method,substitution variable,partial data deletion and endogenous analysis,financial asset holding has a stronger inhibitory effect on intragenerational income flow,and it also has a more significant inhibitory effect on the downward income flow of families with higher education background.In addition,based on the analysis of intra-generational income mobility perspective,holding financial assets to understand the income gap in our country and poverty reduction also plays an important role.The conclusion of this paper provides policy enlightenment for further deepening financial reform and narrowing income gap,which is of great theoretical and practical significance for improving intra-generational income mobility and realizing common prosperity for all people.