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Can parental financial literacy enhance children's higher education opportunities?

Author

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  • Lee, John Chi-Kin
  • Tan, Weiqiang
  • Zhao, Zhenzhou

Abstract

Financial literacy is becoming increasingly important because of the growing trend of financialization. Using the China Family Panel Studies database, this study examines how parental financial literacy influences children's likelihood of attending a university. Our analysis yields several key findings. First, there is a positive relationship between parental financial literacy and the likelihood of children's enrolling in a university bachelor's degree program. This effect is particularly strong among families in provinces with relatively high GDP, which reflects their high level of financialization. Second, the intergenerational effect of financial literacy is independent of family income but associated with parents' saving for their children's education. Third, the benefits of parental financial literacy are stronger for male (vs. female) students, rural (vs. urban) students, and students whose parents have low (vs. high) educational attainment. This study empirically validates the intergenerational effect of financial literacy on educational outcomes.

Suggested Citation

  • Lee, John Chi-Kin & Tan, Weiqiang & Zhao, Zhenzhou, 2025. "Can parental financial literacy enhance children's higher education opportunities?," International Review of Financial Analysis, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:finana:v:97:y:2025:i:c:s1057521924007300
    DOI: 10.1016/j.irfa.2024.103798
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