Understanding Financial Vulnerability Among Asians, Blacks, and Hispanics in the United States

34 Pages Posted: 29 Aug 2023

See all articles by Andrea Hasler

Andrea Hasler

George Washington University - School of Business

Annamaria Lusardi

Stanford University - Stanford Institute for Economic Policy Research

Olivia S. Mitchell

University of Pennsylvania - The Wharton School, Pension Research Council; University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

Alessia Sconti

The Global Financial Literacy Excellence Center

Multiple version iconThere are 2 versions of this paper

Date Written: July 1, 2023

Abstract

The COVID-19 crisis has brought to light the deeply rooted financial struggles that many people face in America, and it also exacerbated racial inequality. In particular, minority communities have been disproportionately impacted by the pandemic in many ways, making them ideal targets for efforts to promote financial well-being. This paper examines the financial vulnerability of Asians, Blacks, and Hispanics in the United States, along with potential drivers, using data from the 2021 National Financial Capability Study and the 2022 TIAA Institute-GFLEC Personal Finance Index. We analyze indicators measuring financial vulnerability across three topics of personal finances: retirement planning, indebtedness, and financial resilience. We find that more Blacks and Hispanics reported being financially vulnerable, compared to Whites and Asians. The main contributing factors to the racial and ethnic gaps in financial vulnerability are single parenthood, youth, lack of savings and wealth, too much debt, income shocks, costly money management practices, and low financial literacy levels. The empirical analysis is complemented by roundtable discussions with experts and thought leaders from National CAPACD and UnidosUS. Our research findings and recommendations can be used to develop more inclusive and tailored financial education programs.

Keywords: financial literacy, minority, debt, financial fragility

JEL Classification: G53, D1, I3

Suggested Citation

Hasler, Andrea and Lusardi, Annamaria and Mitchell, Olivia S. and Sconti, Alessia, Understanding Financial Vulnerability Among Asians, Blacks, and Hispanics in the United States (July 1, 2023). TIAA Institute Research Paper Series No. 200, The Wharton School Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=4555492

Andrea Hasler (Contact Author)

George Washington University - School of Business ( email )

Washington, DC 20052
United States

Annamaria Lusardi

Stanford University - Stanford Institute for Economic Policy Research ( email )

366 Galvez Street
John A. and Cynthia Fry Gunn Building
Stanford, CA CA 94305
United States

HOME PAGE: http://siepr.stanford.edu/people/annamaria-lusardi

Olivia S. Mitchell

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alessia Sconti

The Global Financial Literacy Excellence Center ( email )

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