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Does population aging increase household financial risk?

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  • Li, Weiwei
  • Long, Teng
  • Long, Can

Abstract

This study investigates the impact of population aging on household financial risk in China using data from the China Family Panel Studies (2014–2022). Results indicate that aging significantly raises financial risk through two key channels, namely, increased financial vulnerability and declining labor share, both contributing to higher household leverage. Regional disparities are evident, with effects intensifying from east to west and rural households being more susceptible than urban ones. Notably, income diversity mitigates these adverse effects. Households with multiple income sources show greater resilience to aging-related financial pressures, highlighting the potential of income diversification policies to reduce demographic-driven financial risks.

Suggested Citation

  • Li, Weiwei & Long, Teng & Long, Can, 2025. "Does population aging increase household financial risk?," Finance Research Letters, Elsevier, vol. 85(PD).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pd:s1544612325014709
    DOI: 10.1016/j.frl.2025.108215
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    References listed on IDEAS

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    1. Justin Doran, 2012. "An analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 39(3), pages 221-237, February.
    2. Wang, Haijun & Zhou, Lili & Liu, Xin & Li, Huiyang & Liu, Ying, 2025. "Digital finance and new quality productive force of enterprise: Based on the analysis of enterprise industrial and commercial big data," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    3. Håkan Lindgren, 2022. "‘Over-indebtedness’ – or not? Household debt accumulation and risk exposure in nineteenth century Sweden," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 70(1), pages 33-56, January.
    4. Justin Doran, 2012. "An analysis of the interdependence of demographic factors, labour effort and economic growth in Ireland," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 39(3), pages 221-237, February.
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    Cited by:

    1. Song, Yingjie & Li, Lin, 2025. "Does the basic pension insurance for urban and rural residents improve residents’ sense of happiness? An investigation based on migrant labor forces," Finance Research Letters, Elsevier, vol. 86(PE).

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    Keywords

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    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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