The Influence Of Children’s Characteristics On Household Financial Asset Allocation

The report to the 20th National Congress of the Communist Party of China pointed out that we should increase people’s property income and standardize the mechanism of wealth accumulation.As an important part of residents’ property income,risky financial assets such as stocks,funds and bonds can,on the one hand,drive the development of relevant industries,and on the other hand,allow ordinary people to enjoy the dividends of financial market development and reform.In recent years,the participation rate of Chinese households in the financial market has been increasing,and the probability and depth of residents’ participation in risky financial investment have been greatly improved,but there are still problems such as limited participation,risk mismatch,and excessive investment in real estate.In this paper,families with unmarried children are selected to study whether the number and gender of children in the family affect the choice of financial assets,and on this basis,some policy suggestions are proposed.The household financial assets studied in this paper mainly include risky financial assets and risk-free financial assets.The former mainly refers to the assets with relatively high risk and return,such as stocks,funds,corporate bonds and foreign exchange,while the latter mainly refers to the assets with relatively low risk and return,such as bank deposits,financial products and national bonds.The author collates the data of China Household Financial Survey(CHFS)in 2019,and uses Probit model and Tobit model to investigate how children’s characteristics affect the family’s asset selection.The results show that:(1)the increase in the number of children in a family will increase the participation and allocation ratio of real assets,and reduce the allocation probability and allocation ratio of risky financial assets.For a long period of time after the birth of children in the family,they need to take care of them,and in most families,women take this responsibility,which will lead to a considerable period of time for women to reduce their participation in the labor force,and their income will also decline.At the same time,raising children requires a lot of expenses,in order to reduce the uncertainty of family assets,residents will also reduce the participation and allocation of financial assets.(2)Families with boys are more inclined to allocate real estate and reduce the proportion of risky financial assets;Families with girls have higher risk tolerance and prefer higher risk assets when allocating assets.Because of gender differences,men and women will face different pressures and responsibilities when they become adults.Parents will take the gender of their children into account when allocating assets and choose different types of assets.(3)Regional sex ratio will affect this "asset selection effect".That is,with the increase of regional sex ratio,the breadth and depth of risky financial assets held by boys’ families will be further reduced,and more assets will be allocated to real assets such as housing and vehicles.This is because families with boys face more pressure in the marriage market and need to increase their competitiveness in the marriage market by buying a house.On the other hand,where the sex ratio is higher,the boy’s family will pay more dowry value,which will reduce the risk preference in asset allocation and further squeeze the holding probability and proportion of risky assets.Based on the empirical analysis of the above data,this paper puts forward different suggestions for different subjects.First of all,the government must improve and implement the corresponding social security system,give birth allowance and other incentive measures when necessary,reduce the decline of family living standard and female income caused by childbirth,and enhance the enthusiasm of the family to give birth.Secondly,the society should advocate a correct concept of gender and fertility.Medical institutions should strictly limit the use of fetal sex identification technology,avoid the imbalance of sex ratio caused by artificial selection of children’s gender,alleviate the promoting effect of high sex ratio on the real estate market,and impose property tax on families with multiple houses.Finally,the majority of residents should improve their financial knowledge and enthusiasm to participate in the financial market,properly allocate part of the family assets in risky financial assets,and share the dividend of reform and development.