Race-Gender Intersectionality and Financial Health of Older Americans: Empirical Insights from the Financial Capability Framework

Background: Financial capability, encompassing financial literacy, access, and behavior, can influence individuals’ ability to manage finances and is a precursor to robust financial health and wellbeing in later life. However, individuals with distinct social identities, such as gender and race, may have varied experiences of financial socialization, resulting in heterogeneous financial capability and health later in life. Guided by the financial capability framework, we examine the intersectional gendered and racial pathways to the links between financial capability and financial health using nationally representative data in the United States.

Methods: We used 11,618 individuals aged 50 and over from the 2018 National Financial Capability Study. Latent path models via structural equation modeling were used to examine the mechanisms of financial capability on adverse financial health (e.g., carrying too many debts, difficulties in making ends meet, and use of alternative financial services). Multigroup comparison was further employed to investigate the moderated effects of race-gender intersectionality (white men, white women, black men, and black women).

Results: Financial literacy and access were positively associated with financial behavior, but financial behavior was negatively associated with adverse financial health. The multigroup comparison revealed that these links operated differently across race-gender intersectionality. Overall, the effects of financial literacy were pronounced in men, whereas financial access and financial behavior were evident in whites. A gradient protective effect of financial capability on adverse financial health was identified in the race-gender intersectionality, suggesting that black women were the most vulnerable group in terms of financial health.

Discussion: Strategies to promote financial health (e.g., financial coaching, credit counseling, and financial profile assessments) in later life should consider targeting blacks, women, and particularly black women. Policies and programs that expand financial inclusion should be developed to reach and cover the financially underserved black and women older adults.