Sex Imbalance And Household Investment In Risky Financial Assets

Over the last 40 years,sex ratio(the number of men divided by the number of women)in China has stayed at a high level.Sex imbalance in China has changed the relative position of men and women in the marriage market,and has significantly influenced household economic decisions.Using 2010 and 2014 CFPS data,this work examines the sex ratio impact on household investment in risky financial assets.The results show that the rising sex ratios significantly increased the possibility of first-son families investing in risky financial assets,however,sex imbalance has no significant impact on the probability of first-daughter families investing in risky financial markets.Specifically,as the sex ratio increases by 0.1,the probability of first-son households taking part in the stock market would increase by 0.98 percentage points,and the probability of participating in the stock or fund market by 1.57 percentage points.The results remain robust after conducting several robustness tests including instrumental variable method estimation,replacement of the dependent variable measurement,the addition of province time trend,the addition of control variables.Through heterogeneity analysis,we find that the positive impact of sex imbalance on household risky financial market participation mainly stems from households with higher education and from eastern or central regions.Mechanism analysis shows that sex imbalance increases risk preference of firstson families,therefore pushes them to participate in the risky financial market.This work provides a new perspective for understanding the household choice of financial assets,and offers theoretical basis for the government to formulate financial policies.