The Impact Of Children’s Characteristics On Household Asset Allocation

Since the reform and opening up,with the rapid economic development of China,the substantial increase in the income level of residents,and the continuous improvement of the financial market,the asset allocation of households has also begun to show diversified characteristics.A family’s asset allocation is affected by a variety of factors,such as individual characteristics,family characteristics and macroeconomic factors,which will have an important impact on the family’s asset allocation.Children are directly or indirectly related to the family’s economy,and children not only affect the family’s consumption and savings,but also have a multifaceted impact on the family’s asset allocation.This paper uses China Family Panel Studies(CFPS)2016 data to study the impact of children’s number,children’s gender ratio,children’s average age on family asset allocation under different children’s marital status,and empirically tests the impact of children’s characteristics on family asset allocation.This paper uses the regional average values of three children characteristic variables as instrumental variables,applies ivprobit model to overcome possible endogeneity problems.After benchmark regression,robustness test was carried out by using replacement sample method and replacement sample and variable method.Then,We empirically analyze whether the mechanism of children’s characteristics affecting family asset allocation exists(the tested mechanism includes family economic pressure,economic dependence and intergenerational support).Finally heterogeneous analysis was carried out according to whether there are children and married children’s age group.Through empirical research,this paper draws the following conclusions :(1)In families with unmarried children : the increase in the number of children will increase the probability of holding cash deposits,debts,lending,other real estate,and cause the probability of holding financial assets and commercial insurance to decrease.This is mainly due to the increase in the number of children will lead to increased liquidity demand and lack of liquidity,while the demand for social relations and the motivation to purchase houses for children will increase,and the risk preference will decrease;a higher gender ratio of children will lead to a decrease in the probability of holding financial assets and commercial insurance,and an increase in the probability of holding current house.The reason is that the motivation to buy a house for children and the resulting decline in risk preference,commercial insurance and other financial investment willingness decline;the average age of children has a positive impact on the probability of holding current house,and has a negative impact on other assets except current housing and financial assets.The main reason is that families purchase houses for their children’s marriage,the family liquidity demand decreases,children ’s economic dependence on families decreases,and intergenerational support for parents increases.(2)In families with married children : the increase in the number of children will lead to a decrease in the probability of holding financial assets and an increase in the probability of holding lending for the same reasons as families with unmarried children;the increase in the sex ratio of children leads to an increase in the probability of holding existing housing and other real estate,indicating the existence of buying a house for sons.The impact of the average age of children on family assets is different from that of families with unmarried children.The probability of holding current house decreases and the probability of holding financial assets increases,indicating that there is the motivation to buy a house for children marriage,while families with married children have lower economic pressure and begin to seek investment income.(3)In the mechanism test of the influence of children’s characteristics on family asset allocation,it is found that the number of children is an important factor causing the increase of family economic pressure.In addition,we come to the conclusion that the increase in the sex ratio and average age of unmarried children will increase the intergenerational support of children to the family and the increase in the average age of married children will reduce the economic dependence of children on the family.(4)The heterogeneity study found that in families with married children,married young sons put more pressure on the family economy than married young daughters,and married older sons had less effect on family daily expenses than married older daughters.