Session: Financial Capability over the Life Course: Heterogeneity, Variations, and Impacts (Society for Social Work and Research 24th Annual Conference - Reducing Racial and Economic Inequality)

The American Academy of Social Work and Social Welfare (AASWSW) identifies "Build Financial Capability for All" as one of the Grand Challenges for Social Work. Financial capability is receiving increasing interest by both policy makers and social work practitioners as it has great potential in reducing economic inequality. Combining the ability to act (financial literacy) and the opportunity to act (financial access), a positive financial behavior (financial functioning) can be realized, which improves economic well-being and creates opportunities of upward mobility (Sherraden, 2013).

However, existing literature lacks conceptual and empirical investigations focusing on the heterogeneity, variations, and impacts of financial capability. Using structural equation modeling approach and nationally-representative cross-sectional and longitudinal data from the National Financial Capability Study (NFCS) and other linked data sets, this symposium addresses three emerging topics in financial capability.

Applying a life course perspective, the first study, "An Investigation of Financial Capability Profiles in Later Life" examines the distinct profiles of financial capability among older adults in terms of their engagement in financial literacy, access, and functioning using 2015 NFCS. This study further describes the interconnectedness of how the heterogeneity of financial capability relates to life-course sociodemographic characteristics and financial outcomes. Results showed that younger, female, non-white, not married, and unemployed older adults were more likely to have lower- to moderate-level of financial capability and, in turn, with negative financial outcomes in general.

Using the same data set, the second study, "Financial Capability in Older Adults: Gender and Racial/Ethnic Differences", investigates the role of race/ethnicity and gender in financial capability by studying the variations and dynamics among financial literacy, financial access, and financial functioning. Findings suggest that there are notable gender and race/ethnicity variations in these relationships, where financial access and access were both positively associated with financial functioning, but the effects were much stronger for older males and whites compared to their female and non-white counterparts.

The last study "Is Financial Capability a Determinant of Health?" makes one of the first efforts to examine the longitudinal impacts of financial capability on health outcomes among general households. Using 2012 NFCS linked with two waves (2012 and 2016) of the RAND American Life Panel, this study dissects financial capability from other commonly measured socioeconomic position indicators such as income, employment, and education. Controlled for socioeconomic indicators and lagged health status, findings reveal that financial capability has a positively long-term effect on health in a 4-year of window of observation.

In total, this symposium offers new insights in understanding heterogeneity, variations, and impacts of financial capability of American households from a life course perspective. These studies work together to generate novel policy implications and future research directions for researchers, policymakers, and practitioners seeking innovative approaches that would reduce economic inequalities across the life course by enhancing financial capability.