Research On The Impact Of Minimum Wage Increase On The Risky Financial Asset Investment Decision Of Low-income Household

The minimum wage policy is an important institutional policy for regulating income distribution in China,and plays an important role in "achieve solid progress in promoting common prosperity".In recent years,scholars have extensively discussed the factors influencing the phenomenon of "limited participation" in risky financial markets,but little research has been conducted on the economic policy factor of minimum wage at the theoretical level.The limited participation in the risky financial market is not conducive to the increase of property income of residents,and the phenomenon of "limited participation" of low-income groups is more serious,which will lead to the further widening of income gap.As an important protection system for low-income workers,the policy effect of minimum wage policy is not only limited to protecting labor income,but may also contribute to the growth of property income by alleviating "limited participation".Based on this,the paper explores the possible impact of the minimum wage on households’ investment in risky financial assets of low-income groups.Using data from the China Household Finance Survey(CHFS)from 2015 to2019,the paper empirically examines the impact and mechanism of minimum wage increases on the investment decision of risky financial assets of low-income groups by using Probit and Tobit models,and conducts related robustness tests.Additionally,heterogeneity is analyzed in terms of urban and rural areas,the existence of formal employment contracts and the regional level of rule of law.The study shows that an increase in the minimum wage promotes low-income households to invest in risky financial assets and increases the depth of household investment in risky financial assets,and the result is strongly robust.The mechanism analysis reveals that the increase in household income and health status of low-income groups is an important channel for the above impact effect.The heterogeneity analysis shows that this effect is more significant in urban areas,household with formal labor contracts,and areas with high levels of the rule of law.We suggest that: the government should further improve the minimum wage adjustment mechanism to guide low-income households allocate risky financial assets rationally,broaden their income avenues and increase their property income,so as to achieve solid progress in promoting common prosperity and improve the people’s wellbeing.The government should improve the social security system to alleviate the health risks faced by low-income households,thus guiding them to optimize their asset allocation.And the government should strengthen publicity and guidance,encourage workers to sign formal labor contracts,and accelerate the process of rule of law to enhance external binding force.