Financial Anxiety in Low- and Moderate-Income Households: Findings From the Household Financial Survey

Despite significant gains in the U.S. economy following the Great Recession, finances remain a common source of stress for many American households. In 2016, 52% of U.S. workers reported that their financial position made them stressed, and research reveals that stress and anxiety associated with finances are particularly common among low-income Americans. In this brief, we explore the topic of financial anxiety, particularly its relationship to demographic and financial characteristics, measures of hardship, and financial behaviors. We find that financial anxiety is strongly linked to the overall levels of debt and assets held by low-income households, as well as their ability to access resources in an emergency, but is not closely linked with income measures. Households incapable of saving due to their expenses and those experiencing material hardships also have higher levels of financial anxiety. Policymakers and program designers could help address this issue in several ways. For example, they might work to expand access to programs intended to provide financial slack to low-income households; assistance in building emergency savings and access to low-cost credit products would improve slack in these households while improving protection against income and expense volatility and its associated stresses

Assessing the Short-Term Stability of Financial Well-Being in Low- and Moderate-Income Households

Much of the literature on household finances tends to focus on discrete or relatively objective measures like savings, debt, economic mobility, and there has been a lack of research on holistic measures of financial well-being. This gap is due in part to the absence of a common understanding of how to define and measure financial well-being; a gap that was recently addressed by the Consumer Financial Protection Bureau’s development of a financial well-being scale. However, the research on this scale is still scarce and little is known about how financial well-being evolves over time. To that end, this paper uses a two-wave survey of low- and moderate-income tax filers to present the first longitudinal analysis of the CFPB’s financial well-being scale. Using a combination of descriptive analysis, OLS regression, and fixed effects panel regression, we assess (1) the stability of financial well-being over a six-month period; (2) the extent to which household characteristics predict volatility in financial well-being; and (3) the relationship between the experience of adverse financial events, including financial shocks and material hardships, and financial well-being. We find that financial well-being scores are extremely stable over the short-term, and that household characteristics are generally not strong predictors of financial well-being changes. We also find that, while adverse financial events like the loss of a job are significantly associated with declines in financial well-being, these changes are not large. These findings have implications for researchers and practitioners interested in using the financial well-being scale in program and policy evaluations. Note: This study was supported in part by the JPMorgan Chase Foundation and the Annie E. Casey Foundation

How do Changing Financial Circumstances Relate to Financial Well-Being? Evidence from a National Survey

This brief is the third and final brief in a series exploring the financial well-being of low- and moderate-income (LMI) households in the United States. The first brief in this series explored how financial well-being differed between LMI households and the general population. The second in the series examined how financial well-being changed over time in a sample of LMI respondents. This brief uses longitudinal survey data paired with administrative tax data to assess how different household experiences—including the use of alternative financial services, the experience of material and medical hardship, and improvements in physical and financial health—correspond to the changes in the financial well-being of LMI households

The different molecular structure and glycerol-to-fatty acid ratio of palm oils affect their nutritive value in broiler chicken diets

The aim of this study is to assess how the fat molecular structure and its glycerol-to-fatty acid ratio (G : FA) affect the fatty acid (FA) apparent absorption of palm oils in broiler chickens. The experimental diets were the result of a basal diet supplemented with 6% of different palm oils. Native palm oil (N), rich in triacylglycerols, was the positive control (T1), and acid palm oil (A), rich in free FA, was the negative control (T2). In order to improve the nutritive value of A, two different nutritional strategies were performed. The first strategy was achieved by adding increasing amounts of free glycerol (G) (4% (T3), 8% (T4) and 16% (T5)) to A, and the second one by adding increasing amounts of mono- (MAG) and diacylglycerols (DAG), coming from re-esterified palm oil (E) (40% (T6), 70% (T7), and 100% (T8)) to A. As a result, eight dietary treatments were formulated with a G : FA ratio ranging from 0.04 to 0.67. These treatments were randomly assigned to 192 one-day-old female broiler chickens (Ross 308), distributed in 48 cages. The results showed how, by keeping the G : FA ratio constant (0.33 mol/mol), the diet with a high MAG and DAG content (T7) achieved higher saturated FA apparent absorption values than did the diet with a high triacylglycerol content (T1) and this, in turn, more than did the diet with a high free FA content (T4). The behavior of oils with high or low G : FA ratio was dependent on whether G was in a free state or esterified as part of acylglycerol molecules. Thus, increasing amounts of G to A did not enhance the total FA apparent absorption, but rather quite the opposite, even impairing the absorption of mono- and polyunsaturated FA. However, increasing amounts of E (rich in MAG and DAG) to A (rich in FFA) did enhance total FA apparent absorption, primarily due to the increased absorption of saturated FA. In conclusion, the greater the G : FA ratio of a palm oil, the greater the absorption of total FA, as long as G is esterified as part of acylglycerol molecules. Thus, the re-esterification process for obtaining E makes sense in order to give added value to A, achieving even greater digestibility values than does its corresponding N

The State of State EITCs: An Overview and Their Implications for Low- and Moderate-Income Households

The success of the federal Earned Income Tax Credit (EITC) has prompted numerous states to develop and administer their own EITC programs. This brief presents the results of analyses that used data from a large sample of low- and moderate-income households to learn more about the relationship between state and federal EITCs as well as about their relationships, respective and combined, with financial behaviors and the experience of financial and material hardship. Given that many EITC beneficiaries face substantial risk of experiencing income volatility and financial shocks, insights gained from this brief can assist policymakers in understanding the importance of expanded EITCs and promoting emergency saving at tax time

Promoting Savings at Tax Time: Insights from Online and In-Person Tax Preparation Services

This report presents findings and insights from Refund to Savings: Applications for myRA, a collaborative project involving the U.S. Department of the Treasury, Washington University in St. Louis, and Intuit, Inc. The project explored methods of promoting the myRA (My Retirement Account) savings program at tax time—that is, when households file their taxes. It focused specifically on opportunities in an online tax-filing setting and in person at Volunteer Income Tax Assistance (VITA) sites. The first component of the project examined the retirement needs of low- and moderate-income (LMI) tax filers through a large, national, online survey. It also assessed the appeal of different messaging strategies with these filers. The project’s second component tested promotional messaging strategies as well as interventions grounded in behavioral economics. Both were delivered via online tax-filing software. The final component used key informant interviews with VITA site directors, staff, volunteers, and taxpayers to explore barriers to and opportunities for the promotion of myRA at VITA sites. In 2017, the U.S. Department of the Treasury announced that the myRA program would be discontinued, but this report identifies several findings with applications for general tax-time savings promotion. In particular, the key findings provide useful insights around messaging and in-person savings promotion at VITA sites. The results may also inform the development of future retirement products or programs. This study clearly shows that the need for retirement savings is great among LMI households. Despite barriers, tax time continues to present an opportunity for the promotion of both retirement savings and savings in general

Does Savings Affect Participation in the Gig Economy? Evidence from a Tax Refund Field Experiment

This paper investigates how saving the federal tax refund affects gig economy participation for low-income online tax filers in the six months following tax filing. Using longitudinal survey and administrative data, we leverage random assignment in a unique refund savings experiment as an instrument for refund savings. We find significant heterogeneity in estimated effects that are consistent with life cycle models on consumption and savings. Specifically, refund savings reduced the likelihood of low-income students working in the gig economy, but increased the likelihood of more economically vulnerable households working in the gig economy. (JEL J22, D14, G51)

Assessing the Short-Term Stability of Financial Well-Being in Low- to Moderate-Income Households

A growing body of research demonstrates that U.S. households experience a high degree of volatility in their finances. This volatility can take the form of large swings in month-to-month income, spells of unemployment, and incurring unexpected expenses.1 Beyond being difficult to predict, these income and expense shocks are costly as well, with one survey finding that the most expensive shock experienced by the median U.S. household cost roughly half of one month’s income.2This financial volatility disproportionately affects low- to moderate-income (LMI) households;3 a population that often lacks the resources to manage this volatility. For example, research from the Survey of Household Economics and Decisionmaking finds that roughly two-thirds of LMI households could not manage a modest $400 expense without taking out a loan they could not pay off immediately.4 This lack of a buffer against financial volatility is to some degree unsurprising, as the budgets of LMI households are largely taken up by essential expenses.5Yet even as households experience high degrees of financial volatility and often lack sufficient buffers against this volatility, there is an open question about the impact this volatility has on households’ sense of well-being. U.S. households report finances as their primary source of stress,6 but they also commonly report that they lead comfortable financial lives.7 These results would seem to indicate something of a disconnect between common measures of subjective and objective financial well-being and speak to the need for more research to understand the drivers of household perceptions of financial well-being.To that end, the Social Policy Institute at Washington University in St. Louis is publishing a series of briefs on financial well-being in LMI households. Our measure of financial well-being comes from the Bureau of Consumer Financial Protection’s (BCFP, formerly the Consumer Financial Protection Bureau) recently-developed financial well-being scale. The BCFP defines financial well-being as representing “financial security and financial freedom of choice, in the present and in the future.”8 This definition of financial well-being directly informed the development of the BCFP’s Financial Well-Being Scale, which provides a reliable and valid measure of subjective financial well-being.9The first brief in this series explored how financial well-being differed between LMI households and the general population. This brief, the second in the series, examines how financial well-being changes over time in a sample of LMI respondents. Using longitudinal survey data matched with administrative tax data, this brief addresses the following questions: • How stable is financial well-being in LMI households over a six-month time period? • Do household characteristics predict stability of financial well-being over a six-month period? • What are the key predictors of financial well-being six months after tax filing in LMI households