Leading economist and Wharton professor Olivia S. Mitchell’s research covers public and private pensions, insurance and risk management, financial literacy, public finance, and wealth accumulation. She has published 300+ books and articles that analyze pensions and healthcare systems, wealth, health, work, wellbeing, household financial decision making, and retirement, and served on President Bush’s Commission to Strengthen Social Security, the U.S. Department of Labor’s ERISA Advisory Council, and as Vice President of the American Economic Association.
Her latest study examines financial well-being (FWB) among Black and Hispanic women. “Financial knowledge is quite low among White women, with only 21% being able to answer all three financial literacy questions. Black and Hispanic women scored even lower, with only 9% of Black women and 13% of Hispanic women deemed financially literate.”
The study also highlights how unemployment is negatively associated with FWB for white women, yet it was not significant for Black or Hispanic women. “One possible explanation is that having a job has less of a positive effect on FWB for Black and Hispanic women. That is, even when they are working, Black and Hispanic women have less access to employer-sponsored benefits including healthcare coverage and paid time off.
The study also takes into account family structure among populations. “Black and Hispanic women were more likely to have financially dependent children, yet this was not strongly linked to lower well-being. By contrast, though White women were less likely to have financially dependent children, when they did, the children contributed to a larger negative impact on mothers’ FWB. This might arise because some parents will limit their own consumption to save for their children’s education, while in other cultures, parents may instead expect that children will provide for them in retirement.
The results of the study make clear that distinct populations need tailored economic approaches. “A ‘one size fits all’ approach is unlikely to address financial well-being deficits across the board, in view of the very different patterns we have uncovered. Instead, targeted programs are likely to better serve people who differ in terms of financial experience.”
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