IDEAS home Printed from https://ideas.repec.org/a/taf/recsxx/v25y2022i1p1081-1126.html
   My bibliography  Save this article

Investment in children’s higher education and household asset allocation in China

Author

Listed:
  • Yuanyuan Gu
  • Mary Arends-Kuenning

Abstract

This paper explores how the anticipated expenditure on children’s college education affects household asset allocation, applying a two-stage budgeting model of asset demand by using the 2016 China Family Panel Studies Data (CFPS). The empirical results show that if a household plans to send a child to college, the probability of holding risky assets increases by 1.7 percentage points, and the probability of holding investable housing assets increases by 3.8 percentage points. Furthermore, we also find that as the expected year of college entry approaches, households prefer less liquid assets. When the expected year is still far in the future, they prefer liquid assets with high-risk and illiquid assets with high-return. These findings imply that policymakers should make reforms in the financial market and real estate market, as well as provide more kinds of investment products, thereby promoting household investment diversification.

Suggested Citation

  • Yuanyuan Gu & Mary Arends-Kuenning, 2022. "Investment in children’s higher education and household asset allocation in China," Journal of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 1081-1126, December.
    • Handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1081-1126
    DOI: 10.1080/15140326.2022.2107371
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/15140326.2022.2107371
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/15140326.2022.2107371?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:recsxx:v:25:y:2022:i:1:p:1081-1126. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/recs .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.