Financial Stress and COVID-19: A Comprehensive Analysis of the Factors Associated with the Pandemic

Keewon Moon, Wookjae Heo (), Jae Min Lee and John E. Grable
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Keewon Moon: Exodus & Flying Education, Seoul 05675, Republic of Korea
Wookjae Heo: School of Hospitality & Tourism Management, Purdue University, West Lafayette, IN 47907, USA
Jae Min Lee: Department of Family Consumer Science, Minnesota State University, 102 Wiecking Center, Mankato, MN 56001, USA
John E. Grable: Department of Financial Planning, Housing and Consumer Economics, University of Georgia, 305 Sanford Drive, Athens, GA 30602, USA

Risks, 2023, vol. 11, issue 12, 1-24

Abstract: The COVID-19 pandemic introduced unprecedented challenges for households globally, serving as a precursor to and trigger for financial stress. This study examined the associations across various factors thought to be associated with financial stress (a psychological syndrome) resulting from the COVID-19 pandemic. Using survey data collected in 2019 ( n = 997) and 2021 ( n = 988), propensity score matching and hierarchical linear modeling were employed to identify the association between financial stress and the pandemic. Results indicated that financial stress increased during the COVID-19 pandemic. Three covariate groups, including financial characteristics, health status, and socio-demographic characteristics, were found to be associated with financial stress levels. The primary contribution of this paper lies in offering a comprehensive understanding of how the dynamics of financial stress evolve with shifting macroeconomic events. This paper serves as a framework to employ a comprehensive financial stress measure and matched samples at various data points. Findings from this study contribute to the existing literature on financial well-being, financial stress, and societal outcomes associated with global health events while providing implications for policy and practice.

Keywords: financial stress; COVID-19; propensity score matching; hierarchical linear modeling; financial behavior (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jrisks:v:11:y:2023:i:12:p:218-:d:1299383

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