Urban Social Endowment Insurance,Liquidity Constraints And Risk Financial Asset Allocation Of Urban Households

In recent years,China’s economy has developed rapidly,residents’ incomes have continued to increase,and financial management consciousness has increased.As the micro-unit of the social system,the demand for investment in risky financial products has gradually increased.The rational and efficient allocation of family financial risk assets will not only help families formulate a reasonable financial plan and maintain a balance of income and expenditure,but also increase family income and thus improve the quality of family life.But looking back,there are endless problems about the allocation of household financial risk assets: households’ participation in risky financial markets is extremely low,the structure of financial assets is very simple,and investment in risky financial assets such as stocks is insufficient.Among them,the proportion of investment in financial assets only accounts for 11.8% of the total assets of urban households in China.The low participation of urban households in China’s financial risk market is not only not conducive to enhancing the ability of urban households to protect their risks and wealth,but also to the healthy development of China’s financial market.Therefore,it isimportant to take households as the research object to study the influencing factors of financial risk asset allocation of urban households in China,and to guide families to invest in financial risk products reasonably and effectively.Historical research shows that labor income is significantly positively related to the allocation of household financial risk assets.The social endowment insurance,as a social system that guarantees the basic life of the elderly and provides retirement benefits,is mainly intended to make up for the lack of labor income after the workers retire.In recent years,China’s social endowment insurance system has undergone many trials and institutional transitions,and its actual coverage and protection level have also improved accordingly.Based on the correlation between family risk financial asset allocation and labor income,the research on the impact mechanism of social endowment insurance and urban family financial risk asset allocation behavior is of great significance.In addition,according to the life cycle theory and lasting income theory,households can smooth consumption and income through the intertemporal allocation of assets to maximize the long-term utility of the family.The ability of households to carry out intertemporal allocation of assets mainly depends on whether households can borrow freely.That is,the family’s credit status will affect the family’s choice of financial risk assets by affecting the family’s expected income.Therefore,this article selects "credit constraints" as another entry point to study how different credit conditions of households affect the allocation of household financial risk assets.This article takes the 2017 China Household Financial Survey Data(CHFS)as a sample,selects the Probit model and the Tobit model,and conducts an empirical analysis on the impact mechanism of social endowment insurance and credit constraints on urban household financial risk asset allocation.First,the article considers whether urban households participate in risky financial markets as explained variables,and uses the Probit model to empirically analyze the impact of social endowment insurance and credit constraints on the possibility of urban households’ participation in financial markets.Theproportion of assets in total household financial assets and the proportion of stock assets in household risk financial assets were used as explanatory variables,respectively,and an empirical analysis was performed using the Tobit model.In addition,due to the interaction between credit constraints and household financial risk investment,and the selection of credit constraint variables may be subjective.Therefore,all the models in the article are endogenously tested,and the sample households are grouped according to household net assets and annual income levels.The variable “family conditions” are used as instrumental variables for credit constraints.The IV Probit model and the IV Tobit model are used to verify the evidence test.The empirical results show that: First,endowment insurance promotes the allocation of risky financial assets in urban households;Second,credit constraints inhibit the allocation of risky financial assets in urban households;Third,Credit constraints weaken the role of social endowment insurance in allocating risky financial assets to urban households.In terms of controlling variables,the age of the head of household,household income,risk attitude of the head of household,education level,and region all have significant effects on the allocation of household risky financial assets.Finally,this article proposes corresponding policy recommendations from the perspective of the government on improving the social endowment security system and alleviating household credit constraints: advocating to accelerate the reform of the entire social endowment insurance system,and comprehensively improving the coverage of social endowment insurance.At the same time,they actively improve the credit market environment,strengthen supervision,improve credit supply and demand mechanisms,and ease household credit constraints.