The finances of Chilean households during the pandemic: an assessment from the 2021 Household Financial Survey

Principali Risultati dell’Household Finance and Consumption Survey: l’Italia Nel Confronto Internazionale (Main Results of the Household Finance and Consumption Survey: Italy in the International Context)

Financial literacy is essential for every individual concerned with public welfare and household portfolio choices. In this study, we investigate the impact of household financial literacy on individuals’ financial behavior using the China Household Financial Survey Data (CHFS) of 2015 and 2017. The results show that financial knowledge has significant current, long-term, and dynamic effects on financial behavior. This finding suggests that financial literacy is an important factor in shaping and improving financial behavior. Second, financial literacy can improve residents’ limited attention, and residents with high attention tend to have formal bank accounts, participate in the stock market, and engage in financial behaviors in situations such as risky financial markets. High attention also helps to improve residents’ financial behavior. This relationship suggests that financial literacy positively impacts formal bank account holding, participation in financial markets, participation in commercial insurance, participation in pension plans, and credit card holdings through limited attention channels that facilitate access to specific financial information. In addition, heterogeneity analysis showed that the impact of financial literacy on financial behavior differs significantly between urban and rural households, between men and women, and between high and low education levels. The study provides valuable insights for policy implications to enhance financial literacy, such as carrying out financial training to improve residents’ knowledge about financial aspects, which further helps to optimize household financial decision-making.

Financial literacy is an indispensable factor in household asset allocation, but market-oriented reforms are also an external factor that cannot be ignored. Using data from the 2013 and 2019 China Household Financial Survey (CHFS), this paper investigates whether the individual’s ability or the market system hinders rural households’ participation and asset investment in the financial market. Findings reveal that both marketization and financial literacy positively affect residents’ financial activities, but the roles of the two are not the same. Financial literacy is an essential factor in increasing participation in the financial market. Moreover, marketization and financial literacy significantly affect rural financial asset allocation decisions in four ways: changing risk preference, using the Internet, alleviating liquid constraints and increasing education expenditure on offspring. Besides, households’ financial behaviors exhibit a stronger correlation with improved network infrastructure, robust legal frameworks, favorable business credit environments, higher social media penetration, and enhanced human capital.

Arthur Kennickell has contributed significantly to spreading internationally the techniques applied in the US Survey of Consumer Finances for the collection of distributional information on household wealth. In particular, euro area countries are hea

This paper provides first–time insights into the socioeconomic specifics of the Austrian wealth distribution. Based on data from the Household Finance and Consumption Survey 2010, we explore patterns of household characteristics associated with the wealth dispersion. Due to the pronounced nonlinear relationship of wealth, we incorporate the complex survey design in quantile regressions to analyze the joint distribution of specific attributes and households net wealth position. Our findings emphasize the role of age, education, the ownership of a main residence and company stakes in order to identify generic households across the distribution. Looking at the top, the results indicate a specific role of being self-employed or having received inheritances.

We argue that the relationship between wealth inequality and fiscal multipliers depends crucially on the type of fiscal experiment used, and on the measure of wealth distribution. We calibrate an overlapping generations model with incomplete markets for different European economies and use Household Finance and Consumption Survey (HFCS) data to compare fiscal multipliers when models are calibrated to match the distribution of gross vs. net wealth. We find a negative relationship between fiscal multipliers and wealth inequality when considering fiscal consolidation programs, in contrast to fiscal expansion experiments which are standard in the literature. The underlying mechanism relies on the relationship between the distribution of wealth and the share of credit‑ constrained agents. We examine the role of household balance sheet compositions regarding asset liquidity and find that when calibrating the model to match liquid wealth, the relationship between wealth inequality and fiscal multipliers is much stronger.

PurposeThe authors analyse how the receipt of a wealth transfer (inheritance or gift) affects labour force participation in 14 EU countries. They compare the effect of receiving an inheritance or a gift and investigate different behaviours at the gender level and educational level and for elderly individuals.Design/methodology/approachThe authors use data from the Household Finance and Consumption Survey for 14 European countries and adopt an instrumental variable approach. They use information on the type of donor (family and nonfamily) to infer the degree of anticipation of a wealth transfer.FindingsThe authors find that unexpected wealth transfers have a negative impact on labour force participation, with a stronger impact for gifts than for inheritances. For gender, they find larger negative impacts for females than for males, which is in line with a weaker attachment to the labour market. Receiving an unexpected wealth transfer may also result in early retirement.Originality/valueThe paper offers a novel comparison of the effect of receiving an inheritance or a gift on labour force participation using a unique European dataset. The authors investigate whether males and females react differently to the receipt of a wealth transfer and the existence of different responses at the educational level and for elderly individuals.

Wealth aggregates implied by the Household Finance and Consumption Survey (HFCS) usually yield much lower amounts than macroeconomic statistics reported in the National Accounts. An important source of this gap may be the under-representation of the wealthiest households in the HFCS. This article therefore combines a semi-parametric Pareto model estimated from top survey data and observations from rich lists with a non-parametric stratification approach to quantify the impact of the missing wealthy households on component-specific micro-macro gaps. We find that unadjusted micro data substantially underestimates wealth inequality. The largest effects are documented for equity. For other components, the missing wealthy explain less than ten percentage points of the micro-macro gap. We find that differences in oversampling strategies limit the cross-country comparability of unadjusted survey-implied wealth distributions and that our top tail adjustment leads to measures that are internationally better comparable.

For the first time, the Household Finance and Consumption Survey (HFCS) dataset enables researchers to have a detailed insight into the relationship between wealth composition and the characteristics of households for the euro area countries. The HFCS is a complex survey accounting for survey design, non-response and coverage problems by providing specific weighting schemes and multiple implicates. This paper investigates the differences between risky asset holders and non-holders in a set of selected countries in the euro area by giving a comprehensive cross-country comparison of their wealth and socio-economic status. The findings show a substantial inequality between these two groups associated with their wealth, real estate ownership and debt level across the euro area countries. However, most of the differences can be reduced to a handful of relevant covariates. In particular, the focus of this paper is on the relationship between background risks and risky assets in the German-speaking countries in the HFCS dataset. So far, Austria and Germany lacked a qualitative dataset of such a scale and detail prior to the HFCS in order to answer questions concerning household risky assets. A logistic model and a GLM with the inverse Gaussian distribution are applied within the complex survey design to explore relevant covariates explaining the probability and the investment level of risky asset holdings. The logistic model for Austrian and German households suggests that housing risk is a negligible and insignificant factor when deciding to invest in risky assets, while credit constraint, occupation-linked income risks and entrepreneurial risks are major negative factors. However, none of these background risk factors are found to be significant when the level of investment is concerned.

Estimation of Disaggregated Indicators with Application to the Household Finance and Consumption Survey

Investing in personal pensions and in private homeownership are the two main investment decisions consumers make over their life cycle with profound implications for their old-age arrangements. With the demographic change ahead, these two sources of additional old-age income will gain in importance in the future. As the Household Finance and Consumption Survey (HFCS) shows, real assets account for the main share in total household assets, with private homeownership representing the asset type which carries the greatest weight for most of EU Member States. In comparison, voluntary pensions and whole-life insurance play only a minor, in many countries even an insignificant role in households’ asset allocation. In addition, there is a positive correlation for both classes of assets with income and age. To enable low-income households in particular to increase participation in both private homeownership and private pensions, Member States apply a broad variety of policies. They can be classified as market-creating, market-correcting or market-compensating social policies. They complement both traditional policies to correct for market failures in financial markets as well as traditional redistributive social policies. However, to date, there is no coherent approach to either objectives or instruments adopted or to the interrelationship between promoting private homeownership and personal pensions within single Member States, let alone across the EU.

Lack of Adjustment of the Cyprus Household Sector Results from the Eurosystemms Household Finance and Consumption Surveys

We investigate how previous generations of migrants and their children integrated into Austrian society, as measured by their wealth ownership. Using individual-level data from the Household Finance and Consumption Survey (HFCS), we document (1) a positive average migrant wealth gap between migrants and natives—that is, migrants owning less wealth than natives, especially in the upper half of the distribution, (2) substantial within-group inequality for migrants, and (3) evidence for catch-up, since second-generation migrants are much more similar to natives in terms of wealth and socio-economic characteristics than first-generation migrants. Using a RIF regression, we confirm an economically significant migrant wealth gap for first-generation migrants after controlling for socio-economic characteristics especially for the upper middle of the distribution, where housing wealth is a particularly relevant asset category. Second-generation migrants’ wealth gap is fully explained by our covariates in the middle of the distribution, whereas at the top where business wealth is more salient, their characteristics predict them to have higher wealth than natives. Decomposing the partial effects of covariates suggests that inheritances have the highest explanatory power for the migrant wealth gap of both first- and second-generation migrants, further buttressing the case for progressive integration in terms of wealth, while the composition of the migrant population, and in particular migrants’ heritage may continue to play a role in their wealth ownership.

Wealth and Income in the Euro Area: Heterogeneity in Householdss Behaviours?

Reverse mortgage is one of the products (perhaps the main one) that is good to obtain additional income by using the habitual residence as collateral. The main objective of this paper is to analyse the effects that reverse mortgage contracting has on household finances over the lifetime of a family according to the socioeconomic group to which it belongs in Spain. Four indicators are employed to measure the immediate and long-term effects. We use a stochastic model with a double source of randomness, survival and entry into dependency, and apply it to the three socioeconomic groups obtained with cluster methodology from the 2017 Spanish Household Financial Survey data. We conclude that the effects are very different depending on the group: regarding only the effects of hiring a reverse mortgage on the income of the family, widowed women aged between 81 and 85 years, with low income and expenses as well as little net wealth, and a habitual residence that represents half of her net wealth (Cluster 1) are the most benefited; considering that the highest impact indicators are on the probability of illiquidity and on the value of lack of liquidity, the use of reverse mortgages benefits more the families in Cluster 3 (high income and expenses and really high net wealth, head of household aged between 76 and 80 years) and less the families in Cluster 2 (medium income, net wealth and expenses, head of household aged between 65 and 75 years).