Indonesia’s capital market has experienced rapid growth over the past decade as digital investment platforms and financial technology have made investing more accessible to younger generations. Students and young professionals now represent a growing share of new investors, making it increasingly important to understand what motivates them to participate in financial markets.
Previous studies have often emphasized financial literacy, investment education, and personal knowledge as the primary drivers of investment behavior. However, less attention has been given to the influence of parents’ socioeconomic background. This latest research addresses that gap by examining whether parents’ financial literacy, investment knowledge, educational attainment, and occupational status affect their children's willingness to invest in Indonesia’s capital market.
The research focused on stock investors from the Special Region of Yogyakarta and Central Java, two provinces with active participation in higher education and increasing investment activity among young adults.
How the Research Was Conducted
The researchers collected data from 199 individuals who had already participated in stock market transactions. Respondents completed online questionnaires distributed through Google Forms during May 2024.
Using a quantitative research design, the study analyzed the responses through Partial Least Squares–Structural Equation Modeling (PLS-SEM), a statistical method that evaluates relationships between multiple factors simultaneously. Rather than examining investment behavior itself, the analysis measured investment intention—the willingness and motivation of young people to participate in the capital market.
The study evaluated four parental characteristics:
- Financial literacy
- Investment knowledge
- Educational background
- Occupational status
These variables were then compared with the investment intentions of Generation Z participants.
Key Findings
The results challenge several common assumptions about financial education within families.
The researchers found that:
- Parents’ financial literacy did not significantly influence their children's investment intentions.
- Parents’ investment knowledge also showed no significant effect.
- Parents’ educational background was not associated with stronger investment intentions.
- Parents’ occupational status had a positive and statistically significant influence on children's willingness to invest.
The findings suggest that economic capacity within the family matters more than parents’ financial expertise.
According to the statistical analysis, parental occupation was the only variable that significantly predicted investment intention, while the other three variables showed no meaningful relationship.
The researchers also found that the four parental characteristics together explained only 9.5 percent of the variation in investment intention. This indicates that many other factors—including personal financial confidence, social media exposure, peer influence, digital financial education, investment experience, and risk tolerance—likely play much larger roles in shaping investment decisions.
Why Financial Literacy Alone Was Not Enough
One of the most interesting conclusions is that Generation Z appears to rely less on their parents for financial knowledge than previous generations.
Instead, today's young investors increasingly learn about investing independently through digital platforms, social media, online communities, educational content, webinars, and investment applications.
Because financial information is now widely available online, parental financial literacy may no longer be the primary source of investment education for young adults.
The researchers also note that many respondents' parents had educational backgrounds no higher than senior high school, potentially limiting their ability to transfer investment knowledge. Meanwhile, Generation Z has grown up in an environment where financial information is accessible almost instantly through smartphones and internet-based learning.
This shift reflects broader changes in financial socialization, where digital technology complements—or even replaces—traditional family-based learning.
Economic Support Creates Investment Opportunities
While financial knowledge was not a determining factor, parents' occupations appeared to influence investment intentions through another pathway: financial resources.
Stable employment often provides families with greater economic security, enabling parents to offer allowances, initial investment capital, or financial support that lowers barriers to entering the capital market.
In other words, young people whose families possess stronger economic capacity may find it easier to begin investing because they have greater access to investable funds.
The findings reinforce the idea that financial inclusion depends not only on education but also on access to economic resources.
Implications for Financial Education and Public Policy
The study carries important implications for educators, policymakers, financial institutions, and capital market regulators.
Rather than relying solely on parents to improve financial literacy, programs designed to increase youth participation in investing should directly engage Generation Z through digital education, interactive learning platforms, university partnerships, and accessible financial services.
Expanding financial inclusion initiatives, lowering investment barriers, and improving access to beginner-friendly investment products may prove more effective than focusing exclusively on family financial education.
The findings also encourage policymakers to recognize that socioeconomic conditions remain an important determinant of investment participation, even in an era where information is freely available online.
Authors’ Perspective
Harefa and Miswanto argue that the findings demonstrate a changing pattern of financial learning among young Indonesians. Their research suggests that family economic capacity, reflected through parents’ occupational status, plays a more influential role in encouraging investment intentions than the transfer of financial literacy or educational background. At the same time, Generation Z increasingly develops investment knowledge independently through digital information sources, illustrating how technology is reshaping financial decision-making among younger generations.
Author Profiles
Jennie Bernadeth Harefa, is a researcher affiliated with the STIE YKPN School of Business, Yogyakarta, with research interests in financial literacy, investment behavior, and behavioral finance.
Miswanto, is a faculty member at the STIE YKPN School of Business, Yogyakarta whose research focuses on behavioral finance, financial literacy, investment management, entrepreneurship, and capital market studies. He has published extensively on financial decision-making, consumer behavior, and sustainable business performance.
Source
Article Title: The Influence of Financial Literacy, Investment Knowledge, Education, and Parents' Work on Their Children's Investment Intentions in The Capital Market (Case Studies in the Special Regions of Yogyakarta and Central Java)
Journal: International Journal of Economic, Finance and Business Statistics (IJEFBS)
Publication Year: 2026
DOI: https://doi.org/10.59890/ijefbs.v4i3.8
URL: http://journalijefbs.my.id/index.php/ijefbs
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