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The Experience of Financial Hardship in Australia: Causes, Impacts and Coping Strategies

Author

Listed:
  • E. Bourova

    (The University of Melbourne)

  • I. Ramsay

    (Melbourne Law School, The University of Melbourne)

  • P. Ali

    (Melbourne Law School, The University of Melbourne)

Abstract

This article outlines the findings of Australia’s first large-scale study on the experiences of people who have recently been unable to pay a debt when it fell due. The study builds upon empirical research on the causes and impacts of financial hardship in the United Kingdom and the United States, and examines the coping strategies that debtors employ to deal with their predicament. The study shows that although an overall increase in economic insecurity since the 1980s – together with rising living costs and rapid growth in household debt – have created a situation in which financial hardship can happen to almost anyone, people who are already in a position of socio-economic disadvantage are especially at risk. Debtors at all levels of income favour individualistic strategies for reducing their expenditure – for some, to the point of foregoing essential living needs. However, for debtors on social security incomes, financial hardship has particularly serious consequences, impacting negatively on health, relationships, and social inclusion, and undermining their ability to afford necessities such as food, heating, and medical care. This article undertakes an analysis of these findings in the context of the literature on economic insecurity, disadvantage, and the growing financialization of everyday life in Australia and overseas.

Suggested Citation

  • E. Bourova & I. Ramsay & P. Ali, 2019. "The Experience of Financial Hardship in Australia: Causes, Impacts and Coping Strategies," Journal of Consumer Policy, Springer, vol. 42(2), pages 189-221, June.
    • Handle: RePEc:kap:jcopol:v:42:y:2019:i:2:d:10.1007_s10603-018-9392-1
    DOI: 10.1007/s10603-018-9392-1
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    References listed on IDEAS

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    1. Gianni La Cava & John Simon, 2005. "Household Debt and Financial Constraints in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 38(1), pages 40-60, March.
    2. Hacker, Jacob S., 2008. "The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream," OUP Catalogue, Oxford University Press, number 9780195335347.
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    Cited by:

    1. Jessica L. Arnup & Nicole Black & David W. Johnston, 2022. "Changes in children’s time use during periods of financial hardship," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(3), pages 1133-1162, July.
    2. Grzegorz Wałęga & Agnieszka Wałęga, 2021. "Over-indebted Households in Poland: Classification Tree Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 153(2), pages 561-584, January.
    3. Christina M. Pollard & Sue Booth & Jonathan Louth & Catherine Mackenzie & Ian Goodwin‐Smith, 2020. "“I'd be sleeping in the park, I reckon”: Lived Experience of Using Financial Counselling Services in South Australia," Economic Papers, The Economic Society of Australia, vol. 39(4), pages 353-366, December.

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