Can Financial Literacy Reduce the Household Debt Burden? Empirical Evidences from CHFS Data

JIA Li; YUAN Tao; DENG Guo-ying

Volume 35 Issue 3

May 2021

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Article Navigation > Journal of Guangdong University of Finance & Economics > 2020 > 35(3): 98-112

JIA Li, YUAN Tao, DENG Guo-ying. Can Financial Literacy Reduce the Household Debt Burden? Empirical Evidences from CHFS Data[J]. Journal of Guangdong University of Finance & Economics, 2020, 35(3): 98-112.

Citation:

JIA Li, YUAN Tao, DENG Guo-ying. Can Financial Literacy Reduce the Household Debt Burden? Empirical Evidences from CHFS Data[J]. Journal of Guangdong University of Finance & Economics, 2020, 35(3): 98-112.

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Can Financial Literacy Reduce the Household Debt Burden? Empirical Evidences from CHFS Data

School of Economics, Sichuan University, Chengdu 610065, China

Received Date: 2019-11-06
Available Online: 2021-05-13
Publish Date: 2020-06-28

Abstract

Abstract

Based on China Household Financial Survey data in 2015, this paper takes the self-assessment solvency as the subjective debt burden indicator, and the difference between the actual debt repayment period and the average debt maturity period as the objective indicator to analyze the financial impact on household debt burden and the mechanism. It is found that financial literacy can significantly reduce both the household's subjective debt burden and the household's objective debt burden; the financial literacy has a significant negative impact on the actual debt repayment period and a significant positive impact on the average maturity of the debt. Further analysis indicates that financial literacy can reduce the household debt burden by increasing household debt repayment funds and improving household debt structure. This research provides new evidences for understanding the relationship between financial literacy and household debt burden, which helps to understand the factors affecting the household debt burden, and offers a useful reference for preventing financial risks.
- household debt,
- financial literacy,
- debt burden,
- household self-assessment solvency,
- financial knowledge,
- loan,
- repayment funds

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References(40)

References

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