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The study investigates the effects of higher education (HE) expansion policy initiated in China in 1999 on individuals’ engagement with risky financial assets. Utilizing a regression discontinuity (RD) design, the analysis reveals a consistent and statistically significant positive relationship between the HE expansion and the likelihood of investing in risky financial assets. The results indicate that the HE expansion policy increases the propensity to invest in such assets by 2.6% points, representing a 37.1% increase relative to the control group’s mean. The study also conducts robustness tests, including bandwidth sensitivity and placebo tests, to reinforce the reliability of these findings. Mechanism analysis identifies increased income, enhanced cognitive ability, and improved access to financial information as key pathways through which higher education fosters greater participation in risky asset markets. This research contributes to the literature by providing new insights into how educational policies can influence financial behaviours in emerging economies.
Tianheng Wang (Thu,) studied this question.