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Household leverage and education expenditure: the role of household investment

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  • Wei, Huaying
  • Guo, Rui
  • Sun, Honghao
  • Wang, Nan

Abstract

Household education expenditure is critical for children's human capital accumulation; however, households may experience leverage load and thus may reduce their spending on children. In this paper, we employ a unique survey conducted by the Tsinghua University China Center for Financial Research (CCFR) in 2011 and 2012 to examine the relationship between leverage and household education expenditure. Our results reveal that higher leverage may constrain households’ spending on children's education, and the adverse effect can be worsened when households are conducting investments. The findings suggest that easing the leverage load for households may help to improve their education expenditure.

Suggested Citation

  • Wei, Huaying & Guo, Rui & Sun, Honghao & Wang, Nan, 2021. "Household leverage and education expenditure: the role of household investment," Finance Research Letters, Elsevier, vol. 38(C).
    • Handle: RePEc:eee:finlet:v:38:y:2021:i:c:s1544612320316512
    DOI: 10.1016/j.frl.2020.101837
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