Against the backdrop of rapid population aging and the growing need for households to build diversified and return-enhancing portfolios, this study uses four waves (2013-2019) of the China Household Finance Survey (CHFS) to examine the impact of pension income on households’ allocation of risky financial assets. The results show that higher pension income significantly increases households’ risky financial investment, as reflected in larger risky asset holdings and a higher share of household portfolios allocated to risky assets. These findings remain robust across multiple empirical checks. Mechanism analyses indicate that pension income promotes risky financial asset allocation partly by improving household financial literacy and strengthening social networks. Furthermore, moderation analysis reveals that this pro-risk effect is significantly amplified in regions characterized by higher upward intergenerational educational mobility. Heterogeneity analyses further show that the effect of pension income is more pronounced among urban households and those residing in regions with higher levels of financial development. These findings suggest that enhancing pension income could serve as an effective policy lever to promote long-term household engagement in financial markets.
Wan et al. (Wed,) studied this question.