Speaker: Teng Li, SYSU

Time: 2024/11/15, 13:30-15:00 (Beijing Time)

Title: Human Capital and Financial Market Participation: Evidence from China’s College Expansion Policy

Venue: 106 Zhonghui Building

Abstract:

This study investigates the impact of China’s 1999 college expansion policy on household investment in risky assets, using a regression discontinuity design with data from the China Household Finance Survey. The policy resulted in a 10.3-percentage-point increase in risky market participation and a 5.3-percentage-point rise in the share of risky assets, with the most significant effects observed in stock investments. Key mechanisms include improved financial literacy, increased income, and better local environments. Additionally, spillover effects from educated peers influenced the investment decisions of unaffected cohorts, contributing 20-30% to the observed outcomes. These findings underscore the vital role of higher education in shaping financial risk-taking behaviors and provide new insights into the broader economic impacts of educational policies in developing countries.