Penny and Pound: Unpacking the Impacts of the Fringe Economy on Household Economic Wellbeing

As an increasing number of American families cope with chronic financial stability, they have withdrawn from traditional financial systems and instead have chosen to participate in the fringe economy where alternative financial services (AFS) and products are costly. Although individuals’ lives have become highly financialized, the issue of financial inclusion is not well understood. Research to date primarily has focused on the banked and unbanked group, yet, evidence indicates the presence of a sizeable group of people who are underbanked. Using a posttest-only, nonequivalent control group quasi-experimental design, this dissertation study investigated banking statuses (unbanked, underbanked, and banked), and AFS use (payday loan, auto title loan, pawnshop services, and rent-to-own product) among American households to understand how banking practices influence financial well-being (e.g., financial security). Drawing data from a recently released national dataset, 2015 National Financial Capability Study, the current study examined relevant demographic, socioeconomic, and financial determinants (e.g., family circumstances, knowledge) of banking status. Employing a propensity score matching approach, this study investigated the impact of banking status on current and future financial security and well-being. Results showed that the underbanked group is sizeable and has a distinctive profile from that of both the unbanked and banked groups. Results also suggest that each of the four AFS products were used by individuals that had distinct characateristics, and the heterogeneity of AFS users calls for further investigation. Results from propensity score matching analysis showed that payday loan use had a modest, negative impact on present financial security, and a small, positive impact on future financial security. Implications for social work practice, education, and research are discussed

Combining children's savings account programs with scholarship programs: Effects on math and reading scores

The study examines school data and their association with participation in the Wabash County Promise Scholarships program, which combines Children's Savings Accounts (CSAs) with scholarships. CSAs are interventions designed to build educational assets for school age children. Policy makers are increasingly turning to CSAs as a way to augment efforts for improving children's educational outcomes. Findings from this study provide some evidence that having a CSA combined with a scholarship is associated with higher math and reading scores. Findings are strongest among the subsample receiving free/reduced lunch. Further, findings suggest that being a saver (i.e., having at least one family or champion contribution) in Promise Scholars is associated with higher math scores but not reading scores. Finally, evidence suggests that CSAs combined with scholarships in the Promise Scholars program are more closely associated with children's math and reading scores than only CSAs

Financial Inclusion in China: Use of Credit

Limited access to credit can cause financial vulnerability for a household and economic loss for a country. Previous studies have shown that only small portions of populations in developing countries use formal credit, but few studies have focused on Chinese populations. Analyzing data from the 2011 China Household Financial Survey, this study explored Chinese households’ credit use. Over half of the sample (53.21%) reported using credit, and only 19.77% of the sample used formal credit. Use of formal credit was associated with the socioeconomic characteristics of household heads (e.g., employment and education) and of households (e.g., income and net worth). The findings suggest that promoting financial inclusion in China involves expanding access to formal credit among socially and economically disadvantaged households

The Negative Association Between Alternative Financial Services Usage and Financial Well-Being: Variations By Income

As reliance on alternative financial services (AFS) usage continues its exponential expansion among American families, policy debates over banking regulation perdure with limited empirical understanding of how usage affects individuals\u27 financial lives. Using data from the 2014 Survey of Household Economics and Decisionmaking, this study explored the association between AFS use and financial well-being using a nationally representative sample (N = 5,896). It also examined the role of household income in AFS use and its relation to financial well-being. Results from regression analyses indicated that AFS use was negatively associated with present financial security measured by credit score, making ends meet, subjective financial well-being, and credit card payment, and that future financial security was measured by having an emergency fund and a rainy-day fund. Moreover, the interaction models showed that lower-income groups had the most negative associations between AFS and most financial well-being indicators, suggesting a substantive role of income in exacerbating the negative relationships. This was the first known study linking use of AFS and household financial well-being with a focus on the role of income. The article concludes with a discussion of implications for policy and social work practice

Financial Inclusion in China: Use of Credit

Limited access to credit can cause financial vulnerability for a household and economic loss for a country. Previous studies have shown that only small portions of populations in developing countries use formal credit, but few studies have focused on Chinese populations. Analyzing data from the 2011 China Household Financial Survey, this study explored Chinese households’ credit use. Over half of the sample (53.21%) reported using credit, and only 19.77% of the sample used formal credit. Use of formal credit was associated with the socioeconomic characteristics of household heads (e.g., employment and education) and of households (e.g., income and net worth). The findings suggest that promoting financial inclusion in China involves expanding access to formal credit among socially and economically disadvantaged households

Digital redlining and the fintech marketplace: Evidence from US zip codes

The rise of digital technologies enables new manifestations of racialization in financial services with marketplace implications. Akin to redlining in the lending market, racialization in the spatial availability of digital technologies—including financial technologies or “fintech”—may raise the costs of banking in black and brown communities. This paper investigates associations between communities’ racial makeup and rates of fintech by leveraging 2015 Esri Business Analyst Market Potential data from the universe of high‐poverty zip codes. Poor black and brown communities experience a form of digital redlining by having the lowest fintech rates. Every percentage increase in a community’s black population was associated with an 18% decrease in their rate of high‐speed internet access, 1% decrease in smartphone ownership, 12% decrease in online banking, and 3% decrease in mobile banking. Relationships were opposite for communities with increasing white populations where whiteness attracts higher rates of fintech, even amidst high poverty.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/168266/1/joca12297_am.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/168266/2/joca12297.pd

The Role of Secured and Unsecured Debt In Retirement Planning

Nearly 40 percent of Americans approaching retirement felt heavily indebted. Understanding the role of secured and unsecured debt in retirement planning becomes an urgent concern for researchers and policymakers alike. Using data from the 2015 National Financial Capability Study (NFCS), the current study identified secured debt (mortgage and auto loan) and unsecured debt (medical debt and credit card debt) among a national sample of pre-retirees aged 51–61 years. Logit regression models were estimated to examine and compare each debt’s relationship retirement planning among pre-retirees. We found a relatively large portion of the pre-retiree sample approached retirement in debt, and having debt was negatively associated with retirement planning. We also found that secured debt does not seem to facilitate retirement planning, and unsecured debt had a strong negative association with retirement planning. Our findings highlight differential impact that debt from different sources can have on retirement security, calling for closer examination on the role of debt in retirement security across income groups and those without retirement plans. Findings of this study yield policy implications on access to retirement accounts and financial education provision towards financial health and solvency of older Americans

Financial Knowledge and Behaviors of Chinese Migrant Workers: An International Perspective on a Financially Vulnerable Population

This article was published in the Journal of Community Practice’s special issue on Financial Capability and Asset Building and was originally presented during the April 2015 conference,Financial Capability and Asset Building: Advancing Education, Research, and Practice in Social Work. The conference was hosted by the Center for Social Development at Washington University in St. Louis and the Financial Social Work Initiative at the University of Maryland School of Social Work

Families’ Financial Stress & Well-Being: The Importance of the Economy and Economic Environments

© 2020, Springer Science+Business Media, LLC, part of Springer Nature. The Great Recession and the unfolding COVID-19 Pandemic Recession—two major disruptions to the economy that occurred just one decade apart—unequivocally confirm the importance of the economy and economic environments for understanding families’ financial stress and well-being. However, recent published literature places too little emphasis on the economy and economic environments and instead focuses on explanations rooted within individuals and families. In this article, we review research on families’ financial stress and well-being published in JFEI between 2010 and 2019, which analyzed data collected during the Great Recession and were subsequently published in the shadow of the economic downturn. We discuss the economy and economic environments as gaps in the literature and encourage future research to focus on these explanations of stress and well-being, especially in response to the pandemic recession

Examining parental educational expectations in one of the oldest children's savings account programs in the country: The Harold Alfond College Challenge

Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/153305/1/2020ChenZhangetalCYSR.pd