Social pensions and risky financial asset holding in China

Abstract

This study explores the impact of social pensions on risky household financial asset holding, taking the Urban and Rural Residents Pension Scheme (URRPS) in China as an example. We combine regression discontinuity with the difference-in-difference approach to analyse the 2015 and 2017 China Household Finance Survey (CHFS) data. The results show that the URRPS has significantly increased the likelihood of holding risky financial assets among Chinese households. Furthermore, the effect is larger for urban households than for rural households. Apart from social pensions, marital and health status, education, risk attitude, household size, asset value, and urban residence also affect the households’ risky financial asset holdings.