Education and FinTech Adoption: Evidence from China

Abstract

In this paper, we explore the role of education in household FinTech adoption. Using representative nationwide household data from the 2017 China Household Finance Survey, we employ the change in China’s compulsory schooling law in the 1980s as an instrumental variable for educational attainment. We find that among Chinese households, education has statistically significant and economically important effects on the use of various FinTech services, including digital banking, mobile payment, digital wealth management, and digital consumer credit. Further analysis indicates that exogeneous increases in education lead to higher levels of financial literacy and social trust, both of which are potential drivers of FinTech adoption. Our findings provide new insights into the importance of education for household financial decision making and technology adoption.