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Skating on Thin Ice: New Evidence on Financial Fragility

Author

Listed:
  • Jasmira T. E. Wiersma
  • Rob J. M. Alessie
  • Adriaan S. Kalwij
  • Annamaria Lusardi
  • Maarten C. J. van Rooij

Abstract

This paper examines the financial fragility of Dutch households by assessing their ability to raise €2000 within a month in the event of a financial emergency. We show that one in seven Dutch households was financially fragile well before the start of the pandemic and resulting slow‐down of the economy. The most fragile groups were the young, households with children, and those with lower education and income levels. While most households relied on their savings to cope with a financial emergency, other coping methods include seeking help from family and friends or credit card borrowing. Further, our findings show that financial and probability literacy are associated with financial fragility and the chosen methods to cope with a financial emergency. These findings emphasize the importance of financial knowledge and numerical ability for financial decision‐making. The results of this study can be used to design targeted policies and financial education initiatives.

Suggested Citation

  • Jasmira T. E. Wiersma & Rob J. M. Alessie & Adriaan S. Kalwij & Annamaria Lusardi & Maarten C. J. van Rooij, 2025. "Skating on Thin Ice: New Evidence on Financial Fragility," Journal of Consumer Affairs, Wiley Blackwell, vol. 59(2), June.
    • Handle: RePEc:bla:jconsa:v:59:y:2025:i:2:n:e70017
    DOI: 10.1111/joca.70017
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    Cited by:

    1. is not listed on IDEAS
    2. Luc Arrondel & Marlene Haupt & María Jesús Mancebón & Gianni Nicolini & Manuel Wälti & Jasmira Wiersma, 2020. "Financial Literacy in Western Europe," PSE Working Papers halshs-03243830, HAL.
    3. Youngwon Nam & Cäzilia Loibl, 2021. "Financial Capability and Financial Planning at the Verge of Retirement Age," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 133-150, March.
    4. G. Silinskas & M. Ranta & T.-A. Wilska, 2021. "Financial Behaviour Under Economic Strain in Different Age Groups: Predictors and Change Across 20 Years," Journal of Consumer Policy, Springer, vol. 44(2), pages 235-257, June.

    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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