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Financial Shocks, Liquid Assets, and Material Hardship in Low- and Moderate-Income Households: Differences by Race

Mathieu Despard (), Michal Grinstein-Weiss, Shenyang Guo, Samuel Taylor and Blair Russell
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Mathieu Despard: Washington University
Michal Grinstein-Weiss: Washington University
Shenyang Guo: Washington University
Samuel Taylor: Washington University
Blair Russell: U.S. Department of Housing and Urban Development

Journal of Economics, Race, and Policy, 2018, vol. 1, issue 4, 205-216

Abstract: Abstract Low- and moderate-income (LMI) households need financial assets to help cope with income and expenditure shocks. Prior research identifies racial differences in wealth and wealth effects. We examined whether these gaps and effects exist for liquid financial assets. Using group invariance tests in structural equation modeling, we assessed the relationship between financial shocks and material hardship, as mediated by liquid financial assets and moderated by race/ethnicity among a sample of LMI tax filers (N = 7544). Though most study participants were employed (71%), average income was only $18,055 and average liquid financial assets was $4701. Black households had $2774 less in liquid financial assets compared to white households (p

Keywords: Low- and moderate-income households; Liquid assets; Financial shocks; Material hardship; Race; Ethnicity (search for similar items in EconPapers)
Date: 2018
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