Disability Type, Financial Capability, and Risky Asset Holding

Abstract

Risky financial asset holding is considered an indicator of financial well-being because risky asset holders are likely to accumulate more wealth than nonholders. Like the general population in the United States, many people with disabilities need long-term financial planning services. The purpose of this study was to examine whether disability type and financial capability are associated with risky asset holding of adults with disabilities. Using data from the 2015 National Financial Capability Study, we found that adults with different types of disabilities have different chances of holding risky assets. After controlling for financial capability, income, and other variables in the logistical model, people who are deaf or have difficulties running errands are more likely, while people with a work disability are less likely, than the mentally disabled to hold risky financial assets. In addition, two financial capability variables, objective financial knowledge, and desirable financial behavior, are positively associated with risky asset holding after controlling for other factors. Several disabilities, financial capability, and other factors showed differences in risky asset holding when lower-income and higher-income subsamples were examined.

The Interplay of Financial Literacy on the Financial Behavior and Well-being of Young Adults: Evidence from Nigeria

“…The development and implementation of the Financial Capability Framework typically entail collaboration across multiple sectors, including government, education, financial services, and community organizations. This cross-sector cooperation enables sharing resources, expertise, and best practices, facilitating more effective and sustainable interventions to enhance financial capability and well-being (Xiao & O'Neill, 2022;Bangma et al, 2021;Hill & Sharma, 2020). In essence, the Financial Capability Framework offers a comprehensive approach to promoting financial literacy, financial behavior, and financial wellbeing by addressing a diverse array of factors influencing individuals' capacity to manage their finances effectively.…”

Differences in financial inclusion by disability type

“…A few prior studies indicate that households with disabilities are financially fragile. Adults with work disabilities are less likely than adults with mental disabilities to hold risky financial assets which can result in lower financial well-being due to the inability to build household wealth (Xiao and O'Neill, 2022). People with psychiatric disorders were found to be financially incapable and mismanaged their money (Lazar et al, 2015(Lazar et al, , 2016.…”

“…Observations were excluded from the study if data was "not identified," "not in universe" or "unknown" for any of the variables measuring banking status, AFS use, discouraged borrower status, monthly income volatility, savings account status or Internet access status. We also removed observations that had "yes" answers to every disability type similar to Xiao and O'Neill (2022). This resulted in 2,310 observations being dropped and the final sample size was 96,522 for measuring banking status and unmet demand for credit.…”

What Factors Predict a Positive Change in a Consumer’s Financial Capability over Time? The New Evidence from Poland

“…Building on previous research on financial capability, the three groups of psychological, demographic, and economic variables were included as control variables (see, e.g., Atkinson et al, 2007;Białowolski et al, 2019Białowolski et al, , 2021Kempson et al, 2005;Reyers, 2019;Salignac et al, 2019;Taylor, 2011;Taylor et al, 2011;Xiao et al, 2014;Xiao & O'Neill, 2020). The demographic variables consisted of eight variables, including: "age", "whether being unemployed", "education (years of education)", "number of persons in the household", "whether living alone in the home", "main employment and work status", "marital status" and "whether smoking".…”

“…The following variables were selected as psychological variables: whether feeling income stability, whether not have felt hopelessness and not had experienced suicidal thoughts in the recent months, whether financial problems and worries not added to your troubles and not made your life more difficult than usual in the recent months, whether experiencing physical health problems obstructing from going out of the house in the recent months, active response to financial emergencies. Previous research showed that psychological and physical variables are highly relevant given that they may predict personal debt (Bridges & Disney, 2010), financial distress, and fragility (Białowolski et al, 2021;Kealy et al, 2018;Xiao & Kim, 2021), holding risky assets (Xiao & O'Neill, 2020) or more broadly financial capability (Taylor et al, 2011;Xiao et al, 2014).…”