Presentation Schedule
Financial Capability and Economic Well-Being of Older Americans: Empirical Insights from the Financial Capability Framework (89178)
Session Chair: Kumudinei Dissanayake
Friday, 28 March 2025 10:55
Session: Session 2
Room: Room 708 (7F)
Presentation Type: Oral Presentation
Financial capability, the interaction of financial literacy, access, and behavior, can influence individuals’ ability to manage finances and build economic stability over the life course. However, empirical evidence linking financial capability and economic well-being in old age is limited. We examine the components and mechanisms of the financial capability framework and investigate the differences between middle-aged (ages 50–64) and older adults (ages 65+) using nationally representative data in the United States. We select 12,840 respondents aged 50 and over from the population-based 2018 National Financial Capability Study. Structural equation modeling and multigroup comparison were used to examine the mechanisms of financial capability on economic well-being and the moderating effects of age. Results indicate that financial literacy and access are positively associated with financial behavior and subsequent economic well-being. The mediation results show that financial literacy and access are equally important in contributing to economic well-being in later life. However, age has no moderating effect, suggesting these associations operate similarly in middle-aged and older adults. The findings suggest that strategies to promote economic well-being in later life through effective finance should be multifaceted, targeting each aspect of financial capability. Practice such as financial coaching and guidance, credit counseling, and financial profile assessments should be integrated into human and social services. Policies and programs that expand financial inclusion, particularly investments in accessible and appropriate financial products, should be developed to reach and cover the financially underserved, especially those with limited financial literacy and restricted access to mainstream financial services.
Authors:
Yu-Chih Chen, The University of Hong Kong, Hong Kong
About the Presenter(s)
Dr. Yu-Chih Chen is an Assistant Professor in the Department of Social Work and Social Administration at the University of Hong Kong.
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