Ability, Educational Attainment, and Household Financial Distress

Funding Information: Open Access funding provided by Aalto University. We gratefully acknowledge financial support from the Academy of Finland and the Foundation for Economic Education. Funding Information: We thank Suomen Asiakastieto Oy and Statistics Finland for the data used in this study. We thank seminar participants at Aalto University for helpful comments and suggestions. Publisher Copyright: © 2022, The Author(s).Using register data on the Finnish population, we show that both ability (measured with comprehensive school GPA) and educational attainment are relevant predictors of financial distress, even after accounting for childhood family environment. Low GPA is an especially useful predictor of financial distress years later for those who attain a secondary-level education at most. Our results suggest that any societal interventions to mitigate financial distress should particularly focus on low GPA individuals, and especially those unlikely to continue their studies after completing comprehensive school.Peer reviewe