China Household Finance Survey Research Articles

Financial Technology, wealth Threshold, and Wealth Inequality in China

This study developed a theoretical model to examine the impact of financial technology (fintech) on wealth inequality from a wealth threshold perspective. The model's numerical simulation results suggest that fintech exerted an inverted U-shaped impact on wealth inequality. Empirical test results based on China Household Finance Survey panel data and fintech index data confirmed this finding. The impact varied across regions and among groups with differing education levels and financial literacy.

Financial Literacy, Fintech, and Risky Financial Investment in Urban Households—An Analysis Based on CHFS Data

In recent years, China’s financial markets have come under increasing scrutiny. In order to explore the impact of financial literacy on urban household investment in the risk financial market, this paper used the micro-data of the 2019 China Household Finance Survey (CHFS) to start from two perspectives: household risk financial investment and the number of investment financial products, namely the breadth of investment. By constructing a probit model and ordered probit model for empirical analysis, the main conclusions are as follows. Benchmark regression results show that the improvement of financial literacy can significantly promote urban households to make risky financial investments and can significantly broaden the types of risky financial investments. Based on the IV-probit model and two-stage least square method, the endogeneity test using the economic and financial information attention degree as the instrumental variable showed that the model results were credible. The robustness test showed that the model results were basically correct. Furthermore, the mechanism analysis found that the use of fintech played an intermediary effect in the process of financial literacy affecting urban household risky financial investment and the amount of investment. This indicates that the improvement of financial literacy can improve the probability of using fintech, thus promoting the household risky financial investment behavior. Heterogeneity analysis based on risk attitude showed that financial literacy had a greater effect on the improvement in the risky financial investment behavior of risk-inclined families, followed by risk-neutral families, and had the least effect on risk-averse families. The research conclusions of this paper are of practical significance to solve the problems related to urban household financial market investment. Therefore, this paper puts forward some suggestions for reference, especially in terms of financial education and the digital economy.

Analysis of the Impact of Digital Inclusive Finance on the Well-being of Rural Residents

Improving the sense of well-being, gain, and security among rural residents has become one of the important tasks for promoting high-quality rural economic development and achieving rural revitalization. This paper, based on data from the China Household Finance Survey (CHFS) from 2015 to 2019, constructs an Ordered Probit model to study and analyze the impact and mechanism of digital inclusive finance on the well-being of rural residents. The results indicate that digital inclusive finance can enhance the well-being of rural residents, and the indices of coverage breadth, usage depth, and digitalization all have significant positive effects on the well-being of rural residents. In terms of the mechanism, digital inclusive finance improves the income of rural residents, promotes entrepreneurship among them, and enhances their financial literacy, thereby increasing their well-being. At the same time, digital inclusive finance has a greater impact on the well-being of samples from rural areas in the central and eastern regions, as well as among rural women and middle-aged and elderly groups.

The Peer Effects of Residents’ Carbon Emission Behavior: An Empirical Analysis in China

The responsible low-carbon behavior of household residents is a crucial factor for the purpose of achieving carbon neutrality in the economy and society. Based on the peer effects theory, this study constructs a fixed-effects model to empirically analyze the existence, heterogeneity, and action mechanism of peer effects in household carbon emission behavior, which uses panel data from the China Household Finance Survey (CHFS). The results indicate that peer effects have a significantly positive impact on residents’ carbon emission behavior, and the results are verified by the robustness test in various ways. Further mechanism tests show that peer effects influence carbon emission behavior through methods including the learning imitation mechanism and competitive imitation mechanism. In addition, we find that peer effects have different impacts on residents’ carbon emission behavior in varying regions, income levels, education levels, and ages groups. This study aims to embed residents’ carbon emission behavior into the strong relationship between surrounding groups, raise consumers low-carbon awareness through publicity, guidance, and group interaction, form a low-carbon atmosphere for the whole society, and contribute to the realization of Sustainable Development Goals.

Self-employment survival in China: does family involvement matter?

Using data from the China Household Finance Survey spanning 2015–2019, we investigate the relationship between family involvement and self-employment survival. Instrumental variables are used to address the potential endogeneity of family involvement. We show that family involvement is crucial in reducing self-employment exit. This significant effect is more pronounced in elderly self-employed and self-employed with children aged 0–5. The underlying mechanisms reveal that family members’ participation in self-employment flexibly allocates idle household labor and improves the household employment rate. Meanwhile, self-employment with family involvement may have better access to credit and better performance, thus enhancing self-employment survival. Our findings are validated by robustness checks, including a discrete time complementary log–log model and estimations using alternative measurements of family involvement and self-employment exit. Our study has useful implications for policy-makers to stimulate family involvement to promote self-employment survival.

Social trust and household financial decision-making: An empirical study based on the usage of household financial technology

This paper utilizes data from the China Household Finance Survey (CHFS) to examine the impact of social trust on household financial decision-making. The results indicate that social trust significantly enhances the adoption of financial technology by households, and this positive effect is further strengthened by an improved understanding of financial knowledge. Additionally, an analysis of regional heterogeneity reveals varying impacts across different areas. It is recommended that policies focus on enhancing social trust and regional education levels to facilitate the use of financial technology and improve decision-making outcomes.

Digital economy, risk attitudes, and entrepreneurial decision-making in urban and rural households in China

Using data from the 2019 China Household Finance Survey, this study examines how the digital economy and household risk attitudes affect entrepreneurial decision-making in urban and rural Chinese households. Risk-taking families are more likely to become entrepreneurs, particularly in economically developed eastern regions. Furthermore, integrating the digital economy boosts entrepreneurial activities within households, especially in the central and western regions. Based on these findings, the government and relevant institutions should strengthen digital infrastructure in the central and western regions, as well as establish an evaluation and monitoring mechanism to ensure the effectiveness of policy measures to promote balanced economic development and sustainable growth in household entrepreneurial activity.

Digital financial inclusion and residents' health: evidence from rural China

The growth of digital financial inclusion has provided new ways of providing financial services in rural areas, greatly affecting the quality of life and health of rural residents. Using data from the China Household Finance Survey, we examine how digital financial inclusion (DFI) impacts the health of rural residents. The results show that DFI can enhance residents' health. Notably, DFI positively impacts the health of rural residents by promoting commercial insurance, improving medical conditions, and enhancing agricultural production efficiency. Additionally, DFI has a more significant effect on improving the health of low-income residents and those in less-developed areas. This research provides compelling evidence to substantiate the assertion that DFI contributes to enhancing the health of rural residents. It offers empirical support and a basis for decision-making to realize the health benefits of digital financial inclusion.

Digital village construction and its mechanistic on farmer entrepreneurship

This study utilizes data from Taobao Villages and the China Household Finance Survey (CHFS) from 2015 to 2019 to analyze the impact of digital village construction on the entrepreneurial activities of farmers. The results indicate that the digitalization of rural areas significantly enhances the entrepreneurial activities of farmers. Mediating effect analysis reveals that the popularization of the digital economy and capital asset allocation play a facilitating role between digital village construction and entrepreneurial activities of farmers. Furthermore, farmer groups with higher levels of education, income, and Second-tier cities are more effective in utilizing digital resources for entrepreneurship.

Does Mobile Payment Raise the Poverty‐Alleviation Resilience of Chinese Households?

ABSTRACTConsidering the complex environment facing the future poverty reduction process in China, and it is increasingly urgent to shift the conversation from the poverty vulnerability to poverty‐alleviation resilience of households. Coinciding with poverty‐alleviation progress, mobile payment has experienced explosive growth, resulting in significant and far‐reaching influences on production and lifestyle. This study constructs a theoretical framework to analyze the impact of mobile payment on poverty‐alleviation resilience (splitting into poverty‐eradication resilience and development resilience). Meanwhile, the impact is empirically investigated using the China Household Finance Survey for 2017 and 2019. The findings reveal that, first, mobile payment significantly increases both poverty‐eradication resilience and development resilience. According to the quantile regression results, mobile payment has a larger contribution to households with a lower poverty‐alleviation resilience, with the contribution diminishing as poverty‐alleviation resilience improves; second, mobile payment significantly increases poverty‐alleviation resilience by increasing self‐insurance capacity and participation in commercial insurance (ex ante), alleviating financial exclusion (ex interim), and promoting entrepreneurship and improving entrepreneurial performance (ex post); and third, social trust significantly improves the effect of mobile payment on poverty‐alleviation resilience, whereas the age of the household head has the reverse effect. Since risk and shocks play a more pronounced role in the persistence of poverty, our research helps to understand poverty alleviation and offers insights into how to eradicate poverty in all its forms and dimensions, thus realizing the 2030 Agenda for Sustainable Development.

Unveiling the adverse selection problem in China's digital lending market: Evidence from CHFS

Using data from the China Household Finance Survey (CHFS) 2019, we reveals a substantial adverse selection issue within China's Internet Credit Loan (ICL) market. Empirical evidence indicates that households with higher Debt-to-Income Ratios (DIR) are more inclined to apply for Internet Credit Loans (ICLs), with an average DIR of 76.9 %, constituting 20 % of ICL applications. While Internet Credit Loans (ICLs) provide alternative financing options, their high fixed interest rates undermine the potential cost advantages associated with digital technology. Adverse selection is especially pronounced in the case of operational loans. Our findings underscore the urgency for regulatory intervention to address these issues effectively.

Research on the impact of digital inclusive finance on the performance of rural returnee entrepreneurs in China

Using data from the 2019 China Household Finance Survey (CHFS), this paper explores the impact of digital inclusive finance on the entrepreneurial performance of returning rural migrants. The study first finds that digital inclusive finance can enhance the entrepreneurial performance of returning rural migrants. Second, it significantly improves entrepreneurial performance in three dimensions: the degree of digitization in inclusive finance, the depth of digital financial usage, and the breadth of digital financial coverage. Third, farmers’ digital participation, digital usage, and the extent of digital usage are crucial pathways through which digital inclusive finance influences their entrepreneurial performance. Fourth, the impact of digital inclusive finance on entrepreneurial performance varies according to different types of migration, duration of migration, scale of entrepreneurship, educational attainment, and credit access channels. The findings of this study help validate the real effects of digital inclusive finance on entrepreneurial outcomes in rural populations.

Can minimum wage increases narrow the gender wage gap? Evidence from China

ABSTRACT Using data from the 2011–2019 China Household Finance Survey (CHFS), this paper examines the effect of minimum wage increases on the gender wage gap. The results show that minimum wage increases can significantly reduce the gender wage gap. We further examine the impact of minimum wages on the gender wage gap across the wage distribution and find that minimum wages are conducive to narrowing the gender wage gap at the bottom and middle parts of the wage distribution, but not conducive to reducing the gender wage gap at the upper part of the wage distribution. We also identity heterogeneous effects of minimum wages on the gender wage gap across age, education level, hukou, and work unit. Finally, we find that minimum wages have a negative effect on low-wage workers’ employment. Therefore, governments need to weigh their role in reducing the gender wage gap against the potential negative employment effects when adjusting the minimum wage standard.

Interest rate liberalization and household investment in China

In this study, we investigate the impact of interest rate liberalization on household investment behavior in China using data from the China Household Finance Survey from 2011 to 2019. We find that financial liberalization significantly increases the likelihood of households participating in financial markets and raises their holdings of riskier assets, driven by the wealth effect. This effect is more pronounced among higher-income, higher-asset, and better-educated households, without housing mortgages, as well as urban households. Our results highlight the importance of financial liberalization policies and provide new perspectives on the “limited participation puzzle” documented in emerging economies, where relatively few households actively invest in financial assets despite high expected returns. This study underscores how interest rate deregulation incentivizes household portfolio reallocation and promotes financial inclusion across socioeconomic groups.

The effect of air pollution on defensive expenditures: Evidence from individual commercial health insurance in China

To mitigate the substantial losses incurred by air pollution, individuals undertake defensive behaviors in the form of health insurance expenses. Leveraging data from the 2011–2017 China Household Finance Survey (CHFS) encompassing 3033 residents, we estimate the causal impact of air pollution on defensive expenditures. Our findings are as follows: (1) Air pollution exhibits a significantly favorable effect on individual commercial health insurance expenses, with a 1% increase in PM2.5 concentration correlating to an 11.02% rise in personal commercial health insurance expenditure. (2) Demographics such as younger individuals, married populations, lower educational attainment cohorts, and urban residents, displaying higher sensitivity to air pollution, tend to purchase more insurance coverage. (3) Risk perception emerges as a pivotal channel through which air pollution affects commercial health insurance expenditure. Our conclusions underscore the significance of risk perception in defensive expenditures, thereby optimizing individual risk mitigation strategies.

A study of the impact of digital finance usage on household consumption upgrading: Based on financial asset allocation perspective

This paper analyzes the impact of digital financial usage on household consumption upgrading using data from the China Household Finance Survey (CHFS) 2015–2019. Overall, using digital financial services stimulates household consumption and enhances consumption patterns. Mechanistic analysis indicates that digital financial usage positively influences consumption upgrading by optimizing household financial asset allocation. This is evidenced across four dimensions: participation in risky financial markets, augmentation of risky asset allocation, and enhancement of financial investment portfolio diversity and efficacy. Furthermore, the influence of digital financial usage on consumption upgrading varies according to age, wealth, and region differences.

Does housing purchase affect entrepreneurship? -Evidence from urban households in China

The study applies an endogenous switching probit model, using the data from the China Household Finance Survey (CHFS) to explore the joint decision mechanism between housing purchase and entrepreneurship and estimate the (treatment) effect of housing-purchase on entrepreneurship. The findings are threefold. First, a higher housing price reduces the probability of house-purchase intention, and also that of actual house-purchase-action. Second, both house-purchase-intention and -action discourage actual entrepreneurship investment. Third, house-purchase-intention has a negative effect on potential entrepreneurship plans, while house-purchase-action encourages households to plan for a business in the future.

Intergenerational educational mobility and family economic vulnerability: Evidence based on the CHFS study

This paper examines how intergenerational educational mobility affects family economic vulnerability using China Household Finance Survey (CHFS) data. The results show that higher educational mobility significantly reduces family economic vulnerability, confirmed by robustness tests. The effect is stronger in regions with higher marketization and among lower-income families. These findings offer valuable insights for policymakers to enhance economic stability by improving educational resources and supporting reforms, addressing educational development, and economic vulnerability issues.

The Impact of Property Tax Expectations on Household Asset Allocation

Rational asset allocation is central to household wealth accumulation. This paper employs data derived from the 2019 China Household Finance Survey to methodically examine the influence of property tax expectations on the asset allocation decisions of households. This study finds that the expectation of property tax positively influences both the probability of holding risky financial assets and their proportion of household assets. The percentage of housing assets constitutes a substantial negative moderating factor affecting the relationship between property tax expectation and household investments in risky financial assets. The positive effect of property tax expectations is more significant in eastern China. A definite expectation of property tax causes a precautionary saving effect among households. This study highlights that forming reasonable expectations about property taxes can help households adjust their investment portfolios in advance, diversify their asset allocation, and mitigate the impact of changes in property tax policies.

ICT adoption, commercial orientation and productivity: Understanding the digital divide in Rural China

This study investigates the impact of Chinese smallholders’ adoption of Information and Communication Technologies—the use of smartphones and computers connected to the internet—on their commercial orientation, land, and labor productivity. Commercial orientation is the share of farm output for sales in the market. We used a control function approach and a selectivity-corrected model. The study uses national survey data from rural sample households, the China Household Database, and the China Household Finance Survey and Research Center. Findings reveal that the adoption of information and communication technologies by Chinese farmers increased the commercial orientation of farming. Furthermore, adopting information and communication technologies increases land and labor productivity by about 21.3 % and 28.2 %, respectively. Farm households’ commercial orientation improved labor productivity by about 35.9 %. Heterogeneity indicates that the adoption of information and communication technologies has a more significant effect on improving productivity for young household heads and small farmers. Policymakers should establish information and communication technologies training programs, develop digital infrastructure, and promote smallholder commercial production to increase agricultural productivity.