Social Endowment Insurance and Inequality of the Household Portfolio Choice

The Moderating Effect of Financial Literacy

Bibliographic Data

ID3371962
AuthorsRui Li (0000-0001-9744-7965, Zhongnan University of Economics and Law), Jing Wu (0000-0002-6559-4335, Zhongnan University of Economics and Law), Shuo Zhang (0000-0002-7812-4260, Zhongnan University of Economics and Law), Siqing Zhang (Zhongnan University of Economics and Law, corresponding author), Yuanyang Wu, Yuan-Yang Wu (0000-0002-2193-2275, Huazhong University of Science and Technology)
Year2023
Volume13
Issue1
Publication date2023-01-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueSAGE Open (JOURNAL)
Journal identifiersISSN: 2158-2440 • E-ISSN: 2158-2440
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/21582440231152399
OpenAlexW4319736962
LanguageEN
Citations received2
References cited22

China implements different social endowment insurance policies between urban and rural areas which may cause differences in investment decisions of urban and rural households. Based on the 2013 to 2017 China Household Finance Survey (CHFS) data and the two-way fixed effect panel model, this study aims to investigate the effect of social endowment insurance on the inequality of household portfolio between China's urban and rural areas and the moderating effect of financial literacy on the relationship between social endowment insurance and household portfolio. The empirical results show that (1) the participation of social endowment insurance is positively related to the possibility of holding risky financial assets and the ratio of risky financial assets; (2) the effect of social endowment insurance is strong and significant in urban areas but weak and not significant in rural areas; (3) the moderating effect of financial literacy on the relationship between social endowment insurance and household portfolio widens the gap of the household portfolio between the urban and rural areas. This paper indicates that the social endowment insurance would affect the household portfolio decisions positively and the financial literacy positively moderates the relationship between social endowment insurance and household portfolio, which just can be applied to urban households. This paper provides evidence of the inequality between the urban and rural households in China and discusses the possible causes of the urban-rural income gap

China · Demographic economics · Economics · Endowment · Endowment policy · Financial literacy · Geography · Labour economics · Panel data · Portfolio · Rural area · Financial Literacy, Pension, Retirement Analysis · Housing Market and Economics · Housing, Finance, and Neoliberalism · Finance

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