Financial Literacy and Household Debt——Empirical Analysis Based on Chinese Household Micro Survey
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| Title | Financial Literacy and Household Debt——Empirical Analysis Based on Chinese Household Micro Survey
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| Author | Wu Weixing, Wu Kun and Wang Jin |
| Organization | Research Center for Applied Finance, University of International Business and Economics |
| Email | wilsonwxwu@126.com；flag95@163.com；jcrystal25@126.com |
| Key Words | Household Debt; Financial Literacy; Overindebtedness |
| Abstract | The savvier borrowing behavior may improve the household financial well-being and contributes to the healthy development of the economy. Using the data from the year 2010 and 2011 “Chinese Survey of Consumer Finance and the Investor Education”, this study investigates the association between financial literacy and household debt. This paper finds that financial illiteracy is widespread especially in special groups: financial literacy increases strongly with education; women display much lower financial literacy than men. Most importantly, this paper finds that those with high financial literacy are much more likely to hold debt, but the relationship between the household overindebtedness and financial literacy is negative. Our findings provide some policy implications: (1) financial literacy differs depending on education, gender and age; (2) any privatization programs should take account into that most individuals are financial illiteracy. |
| Serial Number | WP1094 |
| Time | 2016-08-10 |
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