The Impact Of Children's Composition On Family Portfolio Selection At Full-nest Stage In Family Life Cycle

With the accumulation of household wealth and the development of financial market,how to allocate household assets rationally has become the focus of the family.A large number of studies have found that Chinese family asset portfolio faces limited participation in the market,polarization of investment portfolios,misalignment of investment risks,local investment bias and "asset shortage".In order to better explain the portfolio selection behavior,a large number of scholars began to explore the influence of wealth,income,investor risk preference on household portfolio selection behavior.At the same time,some scholars based on the family life cycle theory to study the family portfolio selection behavior,but most of them take the age of the investor as the proxy variable of the family life cycle which can not reflect the real characteristics of the life cycle of the family.Compared with other family life cycle stages,the economic behavior of the family will be greatly impacted by the birth of the children during the full nest stage.In reality,the composition of family children in our country has also changed because of "the universal two-child policy".So it is more practical to study the influence of the family children composition on the family portfolio selection behavior.Based on the 2013 wave of Chinese Household Financial Survey(CHFS)data,this paper analyzes the impact of the number and gender of children in the full-nest period family on the family portfolio selection,using the Poisson regression model,Probit model and Tobit model for empirical analysis,and using instrumental variables to overcome the endogeneity of the number of children to identify the causal effect of the children's composition on family portfolio selection.In this paper,the family assets are divided into two categories:physical assets and financial assets,the former mainly refers to the real estate,and the latter is divided into monetary of financial assets,securities of financial assets and insurances of financial assets.Monetary of financial assets mainly refer to bank deposits,bank financial products and bonds;securities of financial assets mainly include stocks and funds;and insurances of financial assets mainly refer to commercial insurance.The results show that:due to the altruistic motivation and inheritance motivation among family members,families at full-nest stage will adjust their portfolio selection strategies because of the increase in the number of children.Specifically,because of the altruistic motives among family members,when the family enters the full-nest stage,the mother reduces the supply of labour in order to raise her children,the family income decreases,but the household consumption increases.In this case,in order to ensure the safety of family assets and the future economic security of their children,families will choose to hold more physical assets.And at the same time,because of the inheritance motivation among family members,families' motivation to accumulate wealth is strengthened,which leads to an increase of physical assets,and a reduction in financial assets.In order to help their children who being the role of man or woman releasing their financial pressure from the forthcoming marriage market and family responsibility,the parents will change their portfolio selection behaviors.The families with one son prefer to hold more physical assets and less securities of financial assets in families with only one child.And in families with two children,families with sons tend to hold more physical assets,securities of financial assets and insurances of financial assets,while reducing the monetary financial assets.The results of this paper show that at the full-nest stage,families will adjust their holdings to meet the economic pressure of parents to raise their children due to the number and gender differences of their children.It can provide some theoretical and empirical support for the following scholars to study the family asset allocation optimization model with "children" factor.It can also provide a scientific basis for financial institutions and real estate developers to design and develop products for families with multiple children.At the same time,from the perspective of the change of financial behavior caused by the change of family composition of the population,this paper can provide relevant policy suggestions to the government.