Research On The Influence Of Financial Knowledge On Household Income

Common prosperity is the essential requirement of socialism and an important feature of Chinese modernization.According to the 14 th Five-Year Plan and the Outline of the Vision Target for 2035,more substantial progress should be made in common prosperity by 2035.From the perspective of families,common prosperity is the continuous improvement of the income,property and well-being of families and personal public services.The gap between income and wealth is significantly narrowed,and the equalization of public services is realized.At present,there are still low income level of rural residents,large income gap between urban and rural areas,unscientific income structure and other phenomena.Good financial knowledge accumulation is an important factor for residents to make wise asset allocation decisions,realize wealth accumulation and improve their income level.Relevant data show that the level of financial knowledge of Chinese residents is not high,and their residents are faced with the risk of insufficient personal ability due to the lack of financial knowledge in making investment decisions and obtaining income.Accordingly,this thesis takes the resident family as the research object,studies the influence of financial knowledge on household income,and explores the new role channels to improve the family income level of Chinese residents.This thesis adopts the research idea of “literature collation —— theory analysis—— puts forward hypothesis —— empirical test —— conclusion suggestion” to ensure the unified combination of theory and practice.First,relevant domestic and foreign literature is compiled and analyzed,factor analysis is used to construct financial knowledge indicators,and the status quo of family income,asset allocation and entrepreneurial activities is described,and then research assumptions are put forward on the basis of theoretical analysis.Empirical test,using CHFS(2019)data,through the OLS model analysis of financial knowledge on the influence of urban and rural household income level,and draw lessons from Wen Zhonglin three-step analysis respectively verify the family asset allocation and entrepreneurial two indicators of intermediary effect,and clarify the financial knowledge on the family income mechanism.This paper uses the instrumental variable method to solve the endogenous problem,and then uses the score-plus-sum method to remeasure the financial knowledge to ensure the robustness of the results.Finally,we will summarize the conclusions of this thesis and make targeted suggestions.Based on the above empirical study,This thesis draws the following conclusions:(1)Chinese residents lack of awareness of financial knowledge,The overall financial knowledge level needs to be improved.(2)Financial knowledge has a positive impact on total family income,wage income,transfer income and property income.Whether residents farm,the number of family labor population,health level,household registration,marital status and education level respectively have a differentiated impact on family income.(3)Since most of the household assets in China are mainly housing,The positive impact of financial knowledge on non-investment income is more obvious than that on investment income.(4)The household asset allocation of Chinese residents presents a single feature.The lack of financial knowledge prevents residents from achieving higher returns through effective asset portfolios,it also faces investment risks and wealth losses.(5)Under the premise of controllable investment risks and realistic factors,household asset allocation has a significant intermediary effect between financial knowledge and family income,there is an influencing mechanism of “financial knowledge-family asset allocation-income growth”.Families with a certain level of financial knowledge have more investment experience and are better at reasonable asset allocation,so as to have high profitability and then improve the income level of families.(6)Entrepreneurial activities play some intermediary role in the process of financial knowledge in promoting family income level,the influence mechanism of “financial knowledge-entrepreneurial activities-income growth” is established.Combined with the above conclusions,corresponding suggestions are put forward in enriching the popularization forms of financial knowledge,paying attention to financial knowledge learning,strengthening the supervision of the financial market and maintaining the healthy development of the real estate market.This paper aims to emphasize that the government should improve the level of financial knowledge as one of the public policy goals,strengthen the construction of financial laws and regulations,improve market supervision,ensure the stability of financial order,to improve the income of residents,narrow the gap between rich and poor residents,and achieve common prosperity has important practical significance.