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Basic public service equalization and household risk investment behavior

Author

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  • Zhang, Chang
  • Yao, Bo
  • Zhang, Chenjing

Abstract

Despite extensive research on household financial behavior in emerging economies, limited attention has been given to how public service equalization affects investment decisions, particularly in China's evolving socioeconomic landscape. Using China Family Panel Studies 2020 data and entropy method analysis, this study examines how public service equalization influences household risk investment behavior while considering the moderating effects of social security coverage and elderly burden. Findings reveal that improved public service equalization encourages household participation in risky investments, with social security coverage strengthening this relationship and the elderly burden weakening it. Regional analysis shows stronger effects in eastern regions, while agricultural hukou holders demonstrate increased responsiveness to public service improvements. These insights inform policymakers to promote household financial well-being and market participation across China's diverse economic regions.

Suggested Citation

  • Zhang, Chang & Yao, Bo & Zhang, Chenjing, 2025. "Basic public service equalization and household risk investment behavior," Finance Research Letters, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016647
    DOI: 10.1016/j.frl.2024.106635
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    More about this item

    Keywords

    Public service equalization; Household risk investment; Social security; Elderly burden; Regional heterogeneity; Hukou status;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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