The Able Worry More? Debt Delinquency, Financial Capability, and Financial Stress

Jing Jian Xiao () and Kyoung Tae Kim ()
Additional contact information
Jing Jian Xiao: University of Rhode Island
Kyoung Tae Kim: University of Alabama

Journal of Family and Economic Issues, 2022, vol. 43, issue 1, No 9, 138-152

Abstract: Abstract Research on the link between debt and financial stress is emerging. This study was one of the first attempts to examine the association between debt delinquency and financial stress and the moderating role of financial capability in the association. Delinquencies in three types of debts were examined: (a) mortgage, (b) credit card, and (c) student loan. With data from the 2018 U.S. National Financial Capability Study, multivariate regression results showed that payment delinquencies of mortgage, credit card and student loans were positively, while financial capability was negatively associated with financial stress. Further, surprisingly, the results implied that among consumers with debt delinquencies, financial capability may increase financial stress. If both financial capability’s direct and interactive effect were considered, financial capability may decrease financial stress at much smaller rates than those without debt delinquencies. The situation was the worst among consumers with multiple delinquencies, in which the potential net effect of financial capability on financial stress was positive. The results of this study have implications for consumer financial service practices.

Keywords: Debt delinquency; Financial stress; Financial capability; National Financial Capability Study (search for similar items in EconPapers)
JEL-codes: G51 G53 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1007/s10834-021-09767-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jfamec:v:43:y:2022:i:1:d:10.1007_s10834-021-09767-3

Ordering information: This journal article can be ordered from
http://www.springer. ... es/journal/10834/PS2

DOI: 10.1007/s10834-021-09767-3

Access Statistics for this article

Journal of Family and Economic Issues is currently edited by Joyce Serido

More articles in Journal of Family and Economic Issues from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().