The Impact of Financial Literacy on Family Wealth
Abstract
This study uses the survey data from the China Household Finance Survey (CHFS) to explore the impact of financial literacy on Chinese family wealth. The results show that financial literacy has a positive impact on Chinese family income and assets, in per capita term. Considering the potential endogenous problems, we also apply panel models and an instrumental variable method to test and ensure the robustness of the model results. Moreover, with quantile regressions, the impact of financial literacy is higher at the lower level of income and asset distributions. It can shed light on the policy implication that the improvement of financial literacy can improve family income and assets, especially for the poor.
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