Financial literacy and household financial resilience

Liu, Taixing; Fan, Miaomiao; Li, Youwei; Yue, Pengpeng

Abstract

Rising uncertainty has drawn researchers’ attention towards households’ anti-risk capacities. Using data from the China Household Finance Survey covering 2019 to 2021, this study investigates the impact of financial literacy on household financial resilience. We measure household financial resilience by analyzing inter-period variations in liquid assets pre- and post-Covid-19, coupled with constructing a sensitivity index. Our analysis indicates that financial literacy significantly enhances financial resilience through the wealth effect and risk mitigation effect. This study highlights the critical role of financial literacy in mitigating risks and accelerating recovery from financial disturbances.

Citation

Liu, T., Fan, M., Li, Y., & Yue, P. (2024). Financial literacy and household financial resilience. Finance research letters, 63, Article 105378. https://doi.org/10.1016/j.frl.2024.105378

• Journal Article Type: Article
• Acceptance Date: Apr 8, 2024
• Online Publication Date: Apr 9, 2024
• Publication Date: May 1, 2024
• Deposit Date: Apr 11, 2024
• Publicly Available Date: Apr 10, 2025
• Journal: Finance Research Letters
• Print ISSN: 1544-6123
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 63
• Article Number: 105378
• DOI: https://doi.org/10.1016/j.frl.2024.105378
• Keywords: Financial literacy; Household financial resilience; Wealth effect; Risk mitigation effect
• Public URL: https://hull-repository.worktribe.com/output/4622969