Financial Vulnerability Research Articles

Health shocks and financial vulnerability of the Spanish population under review

Health shocks and financial vulnerability of the Spanish population under review

Equal Pay and Employment in Serbia During the COVID-19 Pandemic

Introduction and objectives: Before the COVID-19 pandemic, Serbia belonged to the group of post-transition countries that were determined to reduce gender inequalities in the labour market through an improved institutional framework and measures to promote women's employment. However, the gender wage gap remains significant. This paper uses data from the Survey on Income and Living Conditions to examine the gender wage gap in Serbia. Methods: The estimates of the stochastic frontier model were obtained using the maximum likelihood estimation method. Results: The results indicate a statistically significant gender wage gap, showing that women on average have a log hourly wage 0.109 and 0.098 lower than men in 2019 and 2020, respectively. The labour market shows similar efficiency of employees. Conclusion: It is predicted that women are paid less than men, even after controlling for the observed factors. Comparing this with the results of previous studies, it can be concluded that the COVID-19 pandemic has contributed to a slight worsening of gender inequalities in the Serbian labour market. Implications and research limitation: Women's financial vulnerability can be exacerbated by leaving the workforce, taking up part-time employment or working in a job with lower benefits. The latter position of women in the labour market or their recognition as potential beneficiaries by pension and social security systems are two ways in which this has practical implications for the public policy. Similar research using data from the post-COVID-19 period would be of great value in assessing changes in women's position in the labour market.

TRUST AND BETRAYAL TRAUMA IN OLDER ADULT FINANCIAL EXPLOITATION

Abstract Despite a growing body of literature on financial exploitation (FE) and older adults, considerably less research has focused on sub-populations of older adults’ experiences with substantiated financial exploitation, particularly exploitation by trusted others. A 2023 study conducted through Wayne State University’s Successful Aging through Financial Empowerment (SAFE) program used a sample of 95 clients ages 55 and over to examine factors associated with participants’ experiences of substantiated FE perpetrated by trusted others. The SAFE program was created in early 2017 to provide no cost assistance to older adults addressing the financial fall out associated with being financially exploited. The study used betrayal trauma theory (BTT) as a conceptual framework in an attempt to understand how financial vulnerability and mental health are associated with FE committed by trusted others. The study used a cross-sectional design to investigate group differences among 32 (33.7%) older adults who were victims of financial exploitation by trusted others and 63 (66.3%) older adults who were victims of financial exploitation perpetrated by strangers. The group of older adults who were victims of FE by trusted others had lower functional ability scores, higher stress and financial exploitation vulnerability scores and lost more money on average than those victimized by strangers. These results suggest older adults who have been victimized by trusted others are more vulnerable and need more assistance with functional tasks than those victimized by strangers. The present study also supports the notion that BTT provides a valuable framework for understanding vulnerability to various types of FE.

RACIAL AND ETHNIC DISPARITIES IN THE EFFECTS OF COVID-19 ON EMPLOYMENT DISRUPTION AND FINANCIAL PRECARITY

Abstract The COVID-19 pandemic disproportionately influenced minoritized individuals, with significantly higher rates of infection and death. One reason for this higher rate is hypothesized to relate to occupational environments of older minoritized populations had going into the pandemic, which also make them more likely to experience disruption in employment due to factors such as illness, and consequently, more financial consequences of the pandemic than their white counterparts. The current project evaluates race and ethnicity differences in disruptions in employment among older workers during the pandemic, and the extent to which those disruptions were related to the inability to pay monthly bills such as rent/mortgage, utilities, medical bills, food, or debt-related payments. Using data drawn from the Health and Retirement Study, including a COVID-19 survey collected in September 2021, this study evaluates older workers who were employed prior to the start of the pandemic to evaluate differences by race-ethnicity in whether and for what reasons they experienced job disruptions, and the extent to which these disruptions were associated with an inability to pay monthly bills. We further evaluate the extent to which being unable to pay monthly bills is moderated by pre-pandemic financial vulnerabilities. Results indicate that Black and Hispanic older people experience more significant financial consequences of job disruptions, and that pre-pandemic financial vulnerabilities significantly moderate the relationship between race-ethnicity and COVID-related financial consequences of job disruptions. To conclude, the policy-implications of these results will be discussed, particularly potential factors that may decrease financial vulnerability during retirement among minoritized populations.

COGNITIVE MISPERCEPTION, DISABILITY, AND MORTALITY AMONG OLDER ADULTS IN 25 COUNTRIES

Abstract Despite a large body of literature on cognitive ability and health, less is known about the health consequences of biased cognitive perception. Using harmonized and nationally representative longitudinal surveys from 25 countries spanning Asia, Europe and the Americas, we document the growing gap between actual and perceived cognitive ability that appears to increase with age, and construct a standardized measure of cognitive misperception. Linking this novel measure with mortality and disability, we model the cognitive misperception – health gradient. Results show that being in the upper quartile of cognitive misperception (i.e., showing heightened overconfidence in cognition) leads to higher mortality rates within 1 year, 3 years, and 5 years. Conditional on survival, being overconfident in cognition also greatly increases the risks of incident disability and frailty, especially for older adults receiving less family support. We identify two possible pathways inducing poorer outcomes: the first stemming from increased risk taking and financial vulnerability; the second associated with suboptimal use of preventive services and declines in health-promoting behaviors. Given the large and profound impacts of cognitive misperception on older adults’ health and well-being, more family and social supports, public investment in education and health literacy, and better healthcare access and affordability are needed to increase the timely awareness of cognitive decline.

FINANCIAL EXPLOITATION OF OLDER ADULTS: INTERDISCIPLINARY PERSPECTIVES ON NEW DIRECTIONS

Abstract Financial exploitation of older adults is a topic that has drawn increased public recognition in recent years. Despite advances in research, services, products, and policies working to prevent financial exploitation of older adults and support victims, interdisciplinary perspectives are needed to strengthen interventions. This symposium will bring together scholars and practitioners to address the issue of financial exploitation from a variety of disciplines, all united in their mission to detect and prevent financial exploitation of older adults and to support victims. The first two presentations in the symposium will highlight conceptual understandings of financial exploitation of older adults, including a revisionary model of financial exploitation of older adults that includes emerging cognitive, cultural, and other contextual factors (Presentation 1) and a study of financial vulnerability and mental health as they are associated with financial exploitation, particularly when perpetrated by trusted others (Presentation 2). The remaining presentations will describe research from cross-sector, cross-industry, interventions. Presentation 3 will describe study findings about a helpline for concerned persons of exploitation victims that dually offers services directed to primary victims of financial exploitation. Presentation 4 will highlight a study of case characteristics associated with a new adult protection law designed to protect older and vulnerable adults experiencing exploitation. Presentation 5 will describe a study of financial professionals’ experiences with, and attitudes toward, financial exploitation of aging clients. Findings from all five presentations will point to next steps for research and intervention across multiple disciplines, including social work, law and policy, healthcare, and financial services.

What broke the pearl of the Indian ocean? The causes of the Sri Lankan economic crisis and its policy implications

Sri Lanka unilaterally defaulted on its external debt in April 2022, exposing its long-standing economic and financial vulnerabilities and igniting a series of inter-related multiple economic crises—fiscal, debt, currency, inflation, and balance of payments—as well as a vast socio-political upheaval. This paper analyses the economic crisis and its various dimensions to understand the sources of the crisis and draw policy implications. The role of fiscal balances and public debt in the crisis, along with debt sustainability, international sovereign bonds, liquidity crisis, and currency collapse, are analyzed. The root cause of Sri Lanka’s economic crisis was running persistent and large fiscal deficits, which were increasingly financed by unsustainable public debt, particularly foreign commercial borrowings. A substantial reduction and reprofiling of debt through restructuring of both domestic and foreign debt to ensure debt sustainability, meaningful fiscal policy reforms anchored by revenue increases and expenditure rationalization to reduce fiscal deficits, and deep growth-enhancing structural reforms are necessary for medium-term rescue and recovery and long-term growth and stability of Sri Lanka. The findings provide important policy lessons for other emerging markets and middle-income economies.

Order Creates Value: Personality, Attitudinal and Behavioral Factors of Financial Vulnerability

In our research, we aim to become acquainted with the attitudes and financial behaviours of financially fragile social groups. Based on an online questionnaire survey (N=22933 adult), we formed groups by cluster analysis and compared them to each other. We examined the groups with multivariable statistical methods, underscoring the characteristics relating to financial vulnerability. Beside we developed the metric for financial fragility. The results draw attention that financial fragility has multiple, complex, interrelated reasons. In terms of financial personality, attitude, and behaviour, they reached the highest average point in case of distinctly adverse claims, while the lowest at beneficial claims. Our results demonstrate that even if the financially vulnerable cluster accounts for 9%, the group of 'money pits' and the 'passive' show several such attitudes and behavioural patterns that could lead to financial fragility in the future. The cumulative ratio of these groups amounts to 32%. Financially vulnerable people do not take good care of either their finances or their household, they can't plan or prolong their wishes, and they judge their situation incurable, which is coupled with anxiety.

Financial Insecurity Among Medicaid Home Care Aides in Washington State

This study aims to explore the financial status of Medicaid Home Care Aides (HCAs) working in Washington State (WA). This study importantly covers both economic and psychological components of financial insecurity, a comprehensive approach that may help advance policy development for HCAs’ financial security. An online survey was conducted from April to May 2019 among employed WA HCAs. The descriptive analyses were conducted using Stata. About two-thirds earned less than $30,000 annually (62%) from all their jobs combined, including non-caregiving work. Over 1 in 4 reported having over $40 k in long-term debt (28%). More than 3 in 4 reported they could only cover housing and basic living expenses using savings for less than 2 months (76%), showing likely unreadiness for sudden financial shocks (financial vulnerability). Nearly 3 in 4 HCAs (73%) experienced at least one material hardship that include housing hardship, utilities hardship, medical hardship, and food insecurity. One in 4 expressed their financial stress was severe. More WA HCAs experienced material hardships (73%) than U.S. low-income families (64.2%). In 2021, the median annual wage for WA HCAs was about 20% higher than the national one; however, their wages still remain below the living wage. In conclusion, although WA HCAs’ wages are comparable to national averages, they still experience financial vulnerability and material hardships. Therefore, achieving living wages is necessary for WA HCAs.

Can the Use of Debt by Nonprofit Organizations Raise Government Funding?

Nonprofit organizations (NPOs) may be reluctant to debt financing because it is associated with an increase in their financial vulnerability. However, based on arguments from signaling and agency theory, debt in NPOs can be viewed favorably from the perspective of government funders. First, the existence of a creditor can be interpreted as a prior guarantee of the NPO's financial health, which would lead to an increase in the government funds received. Moreover, by becoming supervisors of the NPO they finance, creditors encourage an increase in organizational efficiency. This increased efficiency also ultimately influences the increase in government funding. This study seeks to examine the influence of NPO indebtedness on the raising of government funds, proposing that efficiency has a mediating effect on this relationship. For a sample of 6,850 NPOs in England and Wales over the years 2015-2020, our results evidence a partial mediating effect of efficiency on the relationship between NPO debt and government funding. In addition, we find a curvilinear effect of debt on government funding, such that as indebtedness grows, government contributions also increase until the point at which indebtedness is excessive and the effect reverses.

Compulsive Online Shopping, Spending Habits, And Locus of Control on Financial Vulnerability Among Malaysians

Compulsive Online Shopping, Spending Habits, And Locus of Control on Financial Vulnerability Among Malaysians

Research on the Impact of Digital Inclusive Finance on the Financial Vulnerability of Aging Families

In recent years, the issue of population aging has been a challenge for China’s economic and social development. Due to factors such as the imperfect pension security system, the financial vulnerability of families has been greatly impacted by population aging. Digital inclusive finance is a financial model that utilizes digital technology and innovative approaches to provide financial services to low-income groups and impoverished areas. With the rapid development of the concept of digital inclusive finance, an increasing number of households are beginning to use digital inclusive finance products. It is worth exploring whether this financial model can help alleviate the financial vulnerability of aging families. Therefore, it is of both theoretical and practical significance to study the role of digital inclusive finance in improving the financial vulnerability of aging families. This study assembled unbalanced panel data using both 2016 and 2018 China Household Tracking Survey (CFPS) data and the digital financial inclusion index. An empirical analysis was conducted using the ordered probit panel model. The research findings indicate the following: First, the increasing elderly population intensifies the financial vulnerability of families. Second, digital inclusive finance plays a significant role in improving the financial stability of aging families. Third, digital inclusive finance helps alleviate the impact of population aging on family financial vulnerability by mitigating credit constraints and increasing household income. Fourth, a heterogeneity analysis suggests that in female-headed households, the financial vulnerability caused by population aging is more severe, and the role of digital inclusive finance in improving family financial vulnerability is more prominent. Additionally, the purchase of commercial insurance can effectively alleviate the financial vulnerability of families caused by population aging.

Exploring personal savings versus hedonic consumption in the new normal

PurposeConsumers can spend their disposable income on hedonic consumption or save for the future. Their preferences were altered by the prolonged life and livelihood-threatening experiences of the pandemic. This paper aims to study the spillover effect of the pandemic experience on consumer savings attitudes and hedonic purchase preferences in the new normal.Design/methodology/approachThe authors conducted 35 in-depth interviews with consumers in India. The data were analysed thematically.FindingsThe results showed that when fear of life and negative emotions of the pandemic persisted, consumers became short-term focused, moved towards materialism and increased hedonic spending. Alternatively, individuals who faced substantial financial hardships resorted to an increased preference for savings. The relationship between changes in savings orientation and hedonic consumption was found to be moderated by consumer's individual differences in financial vulnerability and life history strategies.Practical implicationsAs the trend towards increased hedonic consumption and preference for luxury products continues, the study findings can be used to devise effective marketing strategies to tap the emerging segment of mass luxury consumption.Originality/valueDespite ample work being conducted in the hedonic consumption domain, it has not been studied in conjunction with savings orientation, a significant determinant. This research links personal savings orientation with hedonic spending and substantiates that purchase decisions are cognitively weighted as a choice of discretionary spending against the opportunity to save.

Strengthening Self-Reliance: State Interventions and Their Impact on Kerala’s Self-Employed

The paper focuses on the topic of state support for the self-employed in Kerala, examining its relevance to different segments of the self-employed population in light of their need to navigate a dynamic and evolving business environment. The paper takes a descriptive and analytical approach to study the response of beneficiaries to these state-backed initiatives. In today's rapidly changing economic landscape, the self-employed constitute a significant and diverse sector, often facing uncertainties, financial vulnerabilities, and challenges in accessing social safety nets. This paper explores the multifaceted dimensions of state support tailored to the self-employed in Kerala, shedding light on its implications for distinct segments within this group. The study delves into the pivotal role that state support plays in bridging the gap between the self-employed and the evolving business environment. Different segments of the self-employed, such as artisans, street vendors, and freelance professionals, each encounter unique challenges. The paper employs a descriptive approach to outline the varied state interventions, ranging from financial aid and skill development programs to market access initiatives, designed to bolster the resilience of these individuals. Furthermore, the paper employs an analytical lens to investigate the effectiveness of these state measures and their alignment with the needs and aspirations of the self-employed. The findings of this study contribute to the discourse on social policy and economic development, highlighting the importance of targeted state interventions for the self-employed. By shedding light on the successes, limitations, and challenges of existing initiatives, the paper aims to inform policy-makers and stakeholders about refining and enhancing state support for a more inclusive and sustainable self-employed sector.

Do social networks affect household financial vulnerability? Evidence from China

Using data from China Family Panel Studies (CFPS) in 2018, we first examine the impact of social networks on household financial vulnerability and find that social networks significantly reduce the probability of household financial vulnerability. In particular, we find that there is a noticeably larger mitigating effect of social networks on household financial vulnerability among households with higher indebtedness. We also find that social networks can reduce household financial vulnerability, regardless of whether households have commercial insurance or not. Further, we investigate how social networks affect household financial vulnerability. Evidence suggests that social networks can mitigate household financial vulnerability by encouraging informal debt from family or friends and improving financial literacy. Our empirical results are still robust when we address the potential endogeneity problem arising from social networks.

Are we in a bubble? Financial vulnerabilities in semiconductor, Web3, and genetic engineering markets

In the wake of the COVID-19 pandemic, investor interest in the Genetic Engineering sector surged, yet the literature largely overlooks potential price bubbles in this domain. Our study innovatively examines intrinsic price determinants, emphasizing their relation to human behavior. We rigorously investigate price bubbles in the Semiconductor, Web3, and Genetic Engineering sectors from August 2018 to August 2023, leveraging the methodologies of SADF and GSADF. By employing economically and computationally refined ratios, we accurately timestamp bubble occurrences. Our results indicate pronounced price bubble manifestations in all three sectors. Furthermore, GSADF-detected bubbles demonstrate heightened volatility compared to those identified by SADF.

Hepatitis C and obstetrical morbidity in a substance use disorder clinic: a role for telemedicine?

Hepatitis C infection often co-occurs with substance use disorders in pregnancy. Accessing hepatitis C treatment is challenging because of loss to follow-up in the postpartum period, attributable to social and financial barriers to care. Telemedicine has been explored as a means of increasing routine postpartum care, but the potential impact on retention in and completion of care for postpartum hepatitis C has not been assessed. This study aimed to evaluate the impact of hepatitis C on obstetrical morbidity in a substance use disorder-specific prenatal clinic, and the effect of Infectious Disease telemedicine consultation on subsequent treatment delivery. We performed a retrospective cohort study of all patients in our substance use disorder prenatal clinic from June 2018 to February 2023. Telemedicine consults for hepatitis C diagnoses began in March 2020 and included electronic chart review by Infectious Disease when patients were unable to be seen. Our primary outcome was composite obstetrical morbidity (preterm birth, preeclampsia, fetal growth restriction, fetal anomaly, abruption, postpartum hemorrhage, or chorioamnionitis) compared between patients with and without active hepatitis C. We additionally evaluated rates of completed referral and initiation of hepatitis C treatment before and after implementation of telemedicine consult. A total of 224 patients were included. Of the 222 patients who underwent screening, 71 (32%) were positive for active hepatitis C. Compared with patients without hepatitis C, a higher proportion of patients with hepatitis C were White (80% vs 58%; P=.02), had a history of amphetamine use (61% vs 32%; P<.01), injection drug use (72% vs 38%; P<.01), or overdose (56% vs 29%; P<.01), and were on methadone (37% vs 18%; P<.01). There was no difference in the primary outcome of composite obstetrical morbidity. The rate of hepatitis C diagnosis was not statistically significantly different between the pre- and posttelemedicine cohorts (N=29 [41%], N=42 [27%]), and demographics of hepatitis C virus-positive patients were similar, with most being unemployed, single, and publicly insured. A lower proportion of patients in the posttelemedicine group reported heroin use compared with the pretelemedicine cohort (62% vs 90%; P=.013). After implementation of telemedicine, patients were more likely to attend the visit (19% vs 44%; P=.03), and positive patients were much more likely to receive treatment (14% vs 57%; P<.01); 100% of visits in the posttelemedicine group occurred via telemedicine. There were 7 patients who were prescribed treatment by their obstetrician after chart review by Infectious Disease. Patients with and without hepatitis C had similar maternal and neonatal outcomes, with multiple indicators of social and financial vulnerability. Telemedicine Infectious Disease consult was associated with increased follow-up and hepatitis C treatment, and obstetricians were able to directly prescribe. Because patients with substance use disorders and hepatitis C may have increased barriers to care, telemedicine may represent an opportunity for intervention.

The varieties of financial statecraft and middle powers: assessing South Korea’s strategic involvement in regional financial cooperation

In recent years, the financial statecraft literature has expanded from a focus on great powers to encompass the behavior of emerging powers. While offering an important corrective, the literature does not yet adequately address the full variety of the emerging powers’ strategies of financial statecraft. In particular, we argue that regional middle powers behave differently from regional great powers even when they have similar capacities at the global level. For instance, both India and South Korea are categorized as emerging powers in the financial statecraft literature and deploy regional strategies to reduce their financial vulnerability. Yet their financial statecraft strategies have clearly differed in practice. India has sought to challenge the global status quo and influence its neighbors, while South Korea has pursued more modest and defensive goals. Drawing on the middle power literature, we posit that middle powers’ relative position within their home regions explains such differences among the financial statecraft of emerging powers. To demonstrate the utility of this approach, we examine South Korea’s financial statecraft in the Asia-Pacific region. We find that its position as a regional middle power effectively explains its patterns of bilateral and regional cooperation in the monetary sphere.

Economic burden and financial vulnerability of injuries among the elderly in Vietnam

Falls are a leading cause of death among elderly people. However, research on the cost of fall-related injuries is limited in Vietnam. We estimated treatment costs and associated factors among 405 elderly patients in Thai Binh hospitals. Costs were estimated through self-reported data on medical and non-medical expenses. Logistic regression and GLM were used to identify payment and affordability factors. Inpatient and outpatient care costs for fall-related injuries were US$98.06 and US$8.53, respectively. 11.85% of participants couldn’t pay for treatment. Payment ability and cost decline were linked to family income, medical history, and hospital stay length. Elderly with fall-related injuries in Vietnam experienced high costs and severe health issues. Primary healthcare services and communication campaigns should be strengthened to reduce disease burden and develop effective fall injury prevention strategies.

The valuation effect of going International: evidence from QDII in China

ABSTRACT This paper attempts to evaluate the valuation effect of deregulation policy on capital outflows by an event study approach. Using the policy announcement of Qualified Domestic Institutional Investor (QDII) and Bond Connect in China, we find a short-term valuation effect that the stock market responds negatively to the deregulation on capital outflows and firm’s size could act as a shield to defend this shock. Moreover, the financially constrained firms are more negatively affected by this policy shock, suggesting that financial vulnerability is an important force driving down the stock valuation. Finally, both the quality of corporate governance and bureaucratic quality of local government could help firms to avoid valuation loss from this policy shock especially those with tight financial constraints.