Social security, relative deprivation, digital capacity, and household financial investment behavior

Abstract

Household financial investment behavior significantly impacts economic stability and growth, yet the complex interplay between social security, relative deprivation, and digital capability in shaping these decisions remains understudied, particularly in developing economies. While previous research has explored various factors influencing household investments, the mediating role of relative deprivation and the moderating effect of digital capability in the context of social security have been overlooked. This study addresses this gap by examining how these factors interact to influence household financial investment decisions in China. Using data from the China Family Panel Studies (CFPS) 2018, we employ regression analyses and robustness tests to investigate these relationships. Our findings reveal that comprehensive social security coverage encourages households to engage in riskier financial investments, with reduced relative deprivation enhancing this effect and increased digital capability strengthening the relationship between social security and investment decisions. These results underscore the importance of integrating behavioral and technological insights into social security policy to enhance economic participation and development. Our study contributes to a more nuanced understanding of the determinants of household financial behavior in emerging economies and offers valuable insights for policymakers seeking to promote financial inclusion and economic growth.