EMPLOYMENT TYPE, RESIDENTIAL STATUS AND CONSUMER FINANCIAL CAPABILITY: EVIDENCE FROM CHINA HOUSEHOLD FINANCE SURVEY

Jingtao Yi,Xu Cui,Jing Jian Xiao

doi:10.1142/s0217590817430032

Abstract

Research on consumer financial capability is important for consumer financial wellbeing and emerging in the literature. However, studies on consumer financial capability in the Chinese context remain limited. To fill up the research gap, we used data from the 2011 China Household Finance Survey to investigate whether employment type and residential status were associated with consumer financial capability in China. Consumer financial capability was measured by the range of financial assets. Results from OLS and Poisson regressions showed that people employed in the government-managed system, with urban residence registration and with non-local rural residence registration had a better financial capability than their respective counterparts. The results have policy implications for improving consumer financial education and supporting vulnerable consumers.

Highlights

Consumer financial capability refers to individual ability to apply appropriate financial knowledge and perform desirable financial behavior to achieve financial wellbeing (Atkinson et al 2006; Lusardi and Mitchell, 2014; Xiao et al 2014)
The purpose of this study is to examine factors associated with consumer financial capability measured by the household financial asset range using data from a large sample in China
The findings suggested that people employed in the government-managed system had better financial capability than those employed in collective and private owned enterprises, supporting H1

Summary

Introduction

Consumer financial capability refers to individual ability to apply appropriate financial knowledge and perform desirable financial behavior to achieve financial wellbeing (Atkinson et al 2006; Lusardi and Mitchell, 2014; Xiao et al 2014). Social movements promoting financial capability started first in developed countries (Lusardi and Mitchell, 2011; OECD, 2016) and occurred in developing countries. The program has made a call for research on consumer financial capability in China. Consumers in the U.S (Lusardi and Mitchell, 2011) and European countries (OECD, 2016) on average have better financial literacy levels than Chinese consumers, which implies Chinese consumers need more financial education and protection.

Objectives

Results

Conclusion