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This study investigates the components and mechanisms of the financial capability framework using national representative data from the 2015 National Financial Capability Study with the structural equation modeling approach. We find financial socialization and financial education are significantly associated with both financial access and financial literacy, which are associated with positive financial behavior and negatively associated with economic hardship. We further find that financial access plays a more pronounced role in the mediation effects decomposition compared to financial literacy. Our findings demonstrate that financial capability lies in both the opportunity to act and the ability to act—with opportunity relatively more important than ability—and that financial capability is strongly associated with household experiences of economic hardship. Policies and programs should provide accessible and affordable financial products as well as enhance effective financial education and guidance to promote financial inclusion. [ABSTRACT FROM AUTHOR]

Financial capability, the combination of financial literacy (ability to act) and financial access (opportunity to act), improves people's access to resources, and thus has the potential to improve health and well-being. This paper positions financial capability under the framework of social determinants of health and discusses theory and presents empirical evidence on the link between financial capability and health. Using data from the RAND American Life Panel and the structural equation modeling approach, we distinguish financial capability from the common socioeconomic position indicators such as income and education. We find that financial capability has a positive and longitudinal effect on health, independent of race/ethnicity, gender, income, education, and employment. This study demonstrates that financial capability is an independent social determinant of health. It can be theoretically and conceptually defined, empirically measured, and can inform clinical interventions that may improve population health and well-being. Implications for future research, practice, and policy are discussed. [ABSTRACT FROM AUTHOR]

The research literature on the growing field of consumer financial capability displays a wide diversity of understanding about the meaning and measurement of the concept. While sufficient research literature has been produced for a review of measurement domains and indicators, this work remains undone. The aim of the study is to assess the quantitative peer-reviewed research literature to advance the field toward building an evidence base for financial capability interventions and policies to improve family financial well-being and reduce economic inequality. This scoping review study analyzed the financial capability scholarly literature between 2015 and 2018. Overall, 34 studies used quantitative data and met all inclusion criteria for this study. Findings suggest that financial capability measurement constructs were operationalized in 12 different ways (n = 22). Most commonly, financial capability was operationalized as the combination of objective financial knowledge and financial access. Few studies included measurement of financial socialization or financial well-being. Most studies measured financial access using only formal financial access measures, such as bank account ownership and/or whether the consumer has investments. A smaller number of studies measured both formal and informal access (including use of non-bank financial institutions/products). Half of the articles that included financial access used bank account either solely or in combination with other measures as the indicator(s). Many studies lacked any measure of financial access. Recommendations are made about standardizing measurement for the constructs within financial capability and measurement of financial capability. [ABSTRACT FROM AUTHOR]

The majority of American families lack the savings necessary to overcome an unexpected financial shock. Sherraden's (2013) financial capability framework – objective financial knowledge, subjective financial knowledge, financial confidence, and financial access – has been used to explain patterns of emergency savings. To date, research in this vein has been conducted almost entirely using individual level variables, leaving the issue of how context shapes financial capability's relationships to emergency savings largely unaddressed. Using four waves of the National Financial Capability Study (2009, 2012, 2015, and 2018), we estimate multi-level probit models of emergency saving as a function of objective financial knowledge, subjective financial knowledge, financial confidence, savings account ownership, adjusting for a host of state characteristics and financial inclusion indicators. We decompose financial capability constructs into between- and within-state components and find that financial capability constructs operate mostly at the individual level. State's levels of savings account ownership and government ideology were positively associated with increased likelihood of holding emergency savings. Financial inclusion measured by bank account and credit union access explained little. Programs that target individual level financial knowledge and confidence and state policies that promote savings account ownership have promise to raise the low rates of emergency savings. [ABSTRACT FROM AUTHOR]

Financial capability-financial knowledge, skills, and access to financial services-may help smooth transitions to adulthood for youth and is affected by socialization experiences with parents and other family members. Among a sample of youth and their parents enrolled in the YouthSave experiment in Ghana (n = 4,065), this study examined whether physical access to financial services and/or visiting banks with parents or other family members was associated with youth's perceptions and understanding of financial institutions. We found a statistically significant association between visiting the bank with a parent or other family member and youth's attitudes (β = 1.45, p < 0.001) and understanding of financial services (β = 2.96, p < 0.001), controlling for other factors like household income and assets. Conversely, physical access (distance, travel time) was not associated with financial services attitudes or understanding. Parents may play an important role in introducing their children to financial services. Practitioners and policy makers should consider ways to include parents in efforts to promote financial capability among youth. [ABSTRACT FROM AUTHOR]

This study examined the association of financial access and alternative financial services (AFS) using a nationally representative sample from the 2012 National Financial Capability Study (N = 25,509). Structural equation modeling was used to examine the relationship between financial access and AFS usage. Ordinary least squares regression was used to estimate the relationship between banked status and the overall AFS usage as a latent variable while controlling for sociodemographic variables, financial education, financial knowledge, and home ownership. Results suggested that being unbanked was positively associated with AFS usage after controlling for other covariates. Financial education and knowledge, age, gender, marital status, education, household income, and homeownership were significantly associated with AFS usage. These findings have implications for public policy and programs that work with the unbanked. [ABSTRACT FROM AUTHOR]

This study examined financial capability and economic hardship among low-income older Asian immigrants in a supported employment program ( N = 142). Financial capability was defined as a combination of financial literacy, financial access, and financial functioning. Economic hardship was defined as the inability to meet basic needs. Results demonstrated that the majority of the sample had difficulty meeting basic needs. Most respondents answered basic financial knowledge questions incorrectly, and few applied prudent financial management skills. Results indicated that financial access and financial functioning were negatively associated with the risk of experiencing economic hardship, whereas financial literacy was not significantly associated. These findings call for active public policies and programs that address economic challenges among low-income Asian immigrants by enhancing their financial capability. [ABSTRACT FROM AUTHOR]