The best way to get parents to save for retirement is to send their children to college.
April 15, 2026
Original Paper
Can Education Travel Upward? Adult Children's Schooling and Parents' Financial Market Participation
SSRN · 6461758
The Takeaway
We always view education as a gift from parent to child—an investment that flows 'down' the family tree. This paper finds a surprising 'upward' spillover: when children get more schooling, their parents suddenly start participating in the stock market. It’s as if the child’s education 'infects' the parents with better financial habits and a higher comfort with complex systems. The parents aren't just paying for the kid's future; they are accidentally upgrading their own financial lives. This means education isn't just a personal win; it’s a family-wide cognitive upgrade.
From the abstract
Using the staggered implementation of China's Compulsory Schooling Laws (1986-1991) as a quasi-experiment, we find that adult children's schooling significantly increases the probability of their parents holding financial investments. This spillover effect is more pronounced among bettereducated parents and in families with adult sons. Additionally, our results suggest that financial wealth is not the sole channel of influence. Overall, we provide causal evidence of an upward intergenerational s