The Effect Of Chinese Household Debt On Subjective Well-being

At present,the main contradictions in our society have changed,and the future needs of families have become more and more diversified in this context.At the same time,with the booming development of China’s financial market,financial products have become diversified,and lending channels also have become more abundant.The household’s consumption concept has gradually changed from “saving consumption” to “debt consumption”.More and more households choose to borrow to meet their consumption needs,which makes the scale of household debt in my country currently at a relatively high level.The huge financial risks hidden behind this are not conducive to the people’s pursuit of a happy life.When households make economic decisions,financial literacy can play a vital role.Different levels of financial literacy will produce different economic results,making family members form different evaluations of the subjective feelings of life.However,the current research on the relationship between household debt and subjective well-being that includes financial literacy is still relatively scarce.Exploring the mechanism of financial literacy between household borrowing behavior and subjective well-being has important practical significance.It will not only help individuals to strengthen their emphasis on the learning of financial knowledge and skills,but also help the country to continue to promote the implementation of inclusive financial policies,so that financial services can benefit more people through the provision of financial support.Based on this,this article starts from the perspective of household debt,is based on the “Family Stress Theory”,uses the 2017 sample data of the Southwestern University of Finance and Economics China Household Finance Survey database(CHFS),and through ordered logit test and moderating effect analysis,demonstrate the issues to be explored in this research and put forward policy recommendations.This research try to answer four questions: First,in the context of increasing household leverage,what is the impact of household debt on household subjective well-being? Second,are there differences in the impact of different types of household debt structures on household subjective well-being?Third,can financial literacy be able to adjust the impact of household debt on household subjective well-being? Fourth,if the third is true,is the moderating effect of financial literacy heterogeneous in the impact of different types of debt on subjective well-being?The empirical analysis results show that: First,Total household debt has a significant negative impact on subjective well-being.For every unit increase in household debt,the household’s subjective well-being decreases by 0.022.Second,among the different types of household debts,the household’s housing debt,education debt,and medical debt all have a significant negative impact on subjective well-being.Among them,medical debt has the greatest negative impact.For every unit increase in medical debt,the household’s subjective well-being decreases by 0.070.Housing debt has the least negative impact.For every unit increase in housing debt,the household’s subjective well-being decreases by 0.013.Third,because of the large number of samples,this article further starts from the heterogeneity of households,and divides households according to the heterogeneity of urban and rural areas and education levels.It is found that the debts of rural households and low-educated households have a more significant negative impact on subjective well-being than urban households and high-educated households.Fourth,financial literacy exerts a positive moderating effect in the process of household debt affecting subjective well-being.Among them,compared with households with medium and high levels of financial literacy,the debt of households with low financial literacy has a stronger negative impact on subjective well-being.Fifth,among the different types of household debt,financial literacy plays a positive moderating effect in the process of household housing debt affecting their subjective well-being.Among them,compared with households with medium and high levels of financial literacy,the housing debt of households with low financial literacy has a stronger negative impact on subjective well-being.In response to the above conclusions,this article puts forward three research recommendations: On the one hand,in view of the total household debt,housing debt,education debt,and medical debt have a significant negative impact on the household’s subjective well-being.At the level of the macro-policy system,the government must increase the supervision of certain financial institutions and online financial platforms,regulate the order of the credit market,and establish a mechanism for protecting residents’ loans;actively maintain the stable development of the real estate market,prevent substantial changes in housing prices,establish a multi-level housing security system,and prevent the risk of“bubble burst” in the real estate market;from the perspective of medical security,under the realization of universal coverage of medical insurance,the level of medical security will be further improved,especially the level of medical security for rural residents,and the impact of high medical expenses on families will be reduced;correctly guide the social atmosphere,introduce relevant policies at the system level,realize the “double burden reduction” inside and outside the school,solve the problem of “utilitarian” education,and create a healthy education environment.At the micro-behavior level,households must borrow rationally,plan income and expenditures rationally,and find ways to relieve pressure;purchase houses rationally,plan funds rationally;concern about their own health,purchase commercial insurance as a medical supplement,and enhance the household’s ability to resist risks from serious illnesses;pay attention to children’s physical and mental health and comprehensive development.On the other hand,given that the level of household financial literacy is generally low,and the conclusion that financial literacy can positively moderate the relationship between household total debt and housing debt and subjective well-being.This article believes that the government should continue to implement inclusive financial policies,increase the supply of public products for financial education,accelerate the popularization of financial knowledge,carry out financial risk warnings and publicity education,so that financial services can better benefit the public.Family members should also consciously strengthen the learning of financial knowledge and skills,improve financial information collection and judgment capabilities,and actively improve their financial literacy in order to make better economic decisions and conduct economic behaviors.