Access to Liquid Assets As a Determinant of Urban Mother's Life Satisfaction

Background and Purpose:

It is estimated that more than 70 percent of female-headed households in the United States are liquid asset poor, meaning they lack access to emergency cash and/or credit in times of need. This lack of access has been found to restrict their ability to withstand unforeseen adverse life events or to harness opportunities for economic mobility. The choice between paying for a vehicle repair or child care, for instance, is a common dilemma. Despite the hardship associated with lack of resources, less is known about the effects of access to liquid assets on subjective well-being. This study explores access to liquid assets as a predictor of life satisfaction among a sample of lower income urban mothers in the United States. Subjective well-being measures complement objective (i.e. economic) measures and together they provide a more holistic view of social well-being.

Methods:

The study employs data from the 1998 – 2015 Fragile Families and Child Wellbeing Study, a birth cohort of approximately 4,700 parents and their children from 20 U.S. cities. Analyses described in this paper rely on data from the third wave of the panel study when the focal child was approximately three years of age. Independent variables include individual data points and composite measures combined to control for variables likely to moderate life satisfaction. Mothers responded to a single life satisfaction question recorded on a 4-point Likert scale ranging from very satisfied to very dissatisfied which is frequently used and documented in the literature as providing significant correlation with other measures of well-being (Diener, 1984, 2009). To explore the research questions several ordered logit models were performed in Stata 12.

Results:

We found a significant relationship between access to liquid assets and life satisfaction. The proportion of mothers who reported being very satisfied or somewhat satisfied with life was greater for mothers with some access to liquid assets compared to those with none. In the full model controlling for socioeconomic status, health and financial situation, the odds of being somewhat satisfied or better with life was 26% higher for mothers with some access to liquid assets than no access. (OR=1.23, p<.05). Level of access was important. For mothers with good access to liquid assets in comparison to those with no access,the odds of being somewhat satisfied or better with life was 121% higher. (OR=2.21, p<.000).

Conclusions and Implications:

Our findings demonstrate that access to liquid assets is a distinctive predictor of life satisfaction among mothers and therefore important to describing an individual’s financial situation. Expanding the analysis of economic well-being has significant implications for efforts to improve the quality of life for mothers through economic assistance, including opportunities to improve timely access to liquid assets as a component of anti-poverty policy.

References

Diener, E. (1984). Subjective well-being. Psychological Bulletin, 95(3), 542-575. doi: 10.1037/0033-2909.95.3.542

Diener, E. (2009). Well-being for public policy. New York: Oxford University Press.