School achievement in childhood and financial indebtedness in young adulthood – Direct effect, indirect effects, or both?

Abstract

This study set out to explore whether financial indebtedness in young adulthood in Sweden can be traced back to school achievement. The study group consisted of young adults aged 20–30 years with a registration date for a debt at the Swedish Enforcement Authority register during 2017 (n=14,341). This group was compared with a sample of the general Swedish population matched by age, gender, and region of residence (n=59,992). The study used the Karlson/Holm/Breen method, based on conditional logistic regressions, and showed that the odds of financial indebtedness were higher given low overall grades compared to both medium (OR=2.01) and high (OR=4.10) overall grades in compulsory school. This detrimental impact of school achievement seems mainly to be a direct one, that is, less than 25% of its respective total effects was found to be mediated by later criminal status, ill-health, and restricted standard of living. Several sociodemographic factors as well as parental education were also adjusted for. These results suggest that young adults’ financial indebtedness might be yet another detrimental outcome of low school achievement in childhood, reinforcing the importance of on-going attempts to reduce the number of low-performing students in society.