A new paper exploring the financial well-being of Black and Hispanic women will be published in the Journal of Retirement this summer.
Funded by the TIAA Institute, "Financial well-being among Black and Hispanic women" utilizes data from the 2018 edition of the National Financial Capability Study, a survey of about 27,000 U.S. adults.
Annamaria Lusardi, Washington-based chairwoman of economics and accountancy at George Washington University and one of the paper's co-authors, said in a phone interview that the paper was motivated by what she and her co-authors saw as the COVID-19 pandemic disproportionately affecting women, specifically across race.
"What we wanted to do is not actually show the situation now, but study them before the pandemic hit, and in fact in a time of economic growth to actually show when the economy's doing well … it's not lifting all boats," Ms. Lusardi said.
The authors used the U.S. Consumer Financial Protection Board Financial Well-Being Scale to measure financial well-being.
Olivia S. Mitchell, Philadelphia-based professor at the Wharton School of the University of Pennsylvania and another co-author, said in an email that the authors concluded Black and Hispanic women face greater economic challenges than white women in both good times and bad.
"In particular, differences in family structure, employment, and financial literacy contribute to these differential outcomes," Ms. Mitchell wrote.
Because of these outcomes, Black and Hispanic women in the survey are more likely to carry large amounts of student loan debt and engage in the most costly borrowing behavior, Ms. Mitchell wrote.
For example, 20% of Black women surveyed had taken a loan out from their retirement account in the past year, the 2018 study showed, while 14% of Hispanic women had done so, compared with 10% of white women. When asked whether they had taken hardship withdrawals from their retirement accounts in the past year, 19% of Black women had done so compared with 7% of Hispanic women and 5% of white women.
The other co-authors are Robert Clark, professor of economics at North Carolina State University and Hallie Davis, senior research associate at George Washington University.
The paper is currently available on the TIAA Institute's website.