Ability, Educational Attainment, and Household Financial Distress

Niilo Luotonen; Vesa Puttonen; Elias Rantapuska

doi:10.1007/s10603-022-09528-1

Ability, Educational Attainment, and Household Financial Distress

Niilo Luotonen
, Vesa Puttonen
, Elias Rantapuska^*

^*Corresponding author for this work

Department of Finance

Research output: Contribution to journal › Article › Scientific › peer-review

3 Citations (Scopus)

65 Downloads (Pure)

Abstract

Using register data on the Finnish population, we show that both ability (measured with comprehensive school GPA) and educational attainment are relevant predictors of financial distress, even after accounting for childhood family environment. Low GPA is an especially useful predictor of financial distress years later for those who attain a secondary-level education at most. Our results suggest that any societal interventions to mitigate financial distress should particularly focus on low GPA individuals, and especially those unlikely to continue their studies after completing comprehensive school.

Original language	English
Pages (from-to)	655-672
Number of pages	18
Journal	Journal of Consumer Policy
Volume	45
Issue number	4
DOIs	https://doi.org/10.1007/s10603-022-09528-1
Publication status	Published - Dec 2022
MoE publication type	A1 Journal article-refereed

Funding

Open Access funding provided by Aalto University. We gratefully acknowledge financial support from the Academy of Finland and the Foundation for Economic Education. We thank Suomen Asiakastieto Oy and Statistics Finland for the data used in this study. We thank seminar participants at Aalto University for helpful comments and suggestions.

Keywords

Cognitive ability
Educational attainment
Financial distress
Noncognitive ability

Access to Document

10.1007/s10603-022-09528-1Licence: CC BY

s10603-022-09528-1Final published version, 1.18 MBLicence: CC BY

Cite this

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title = "Ability, Educational Attainment, and Household Financial Distress",

abstract = "Using register data on the Finnish population, we show that both ability (measured with comprehensive school GPA) and educational attainment are relevant predictors of financial distress, even after accounting for childhood family environment. Low GPA is an especially useful predictor of financial distress years later for those who attain a secondary-level education at most. Our results suggest that any societal interventions to mitigate financial distress should particularly focus on low GPA individuals, and especially those unlikely to continue their studies after completing comprehensive school.",

keywords = "Cognitive ability, Educational attainment, Financial distress, Noncognitive ability",

author = "Niilo Luotonen and Vesa Puttonen and Elias Rantapuska",

note = "Funding Information: Open Access funding provided by Aalto University. We gratefully acknowledge financial support from the Academy of Finland and the Foundation for Economic Education. Funding Information: We thank Suomen Asiakastieto Oy and Statistics Finland for the data used in this study. We thank seminar participants at Aalto University for helpful comments and suggestions. Publisher Copyright: {\textcopyright} 2022, The Author(s).",

year = "2022",

month = dec,

doi = "10.1007/s10603-022-09528-1",

language = "English",

volume = "45",

pages = "655--672",

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T1 - Ability, Educational Attainment, and Household Financial Distress

AU - Luotonen, Niilo

AU - Puttonen, Vesa

AU - Rantapuska, Elias

N1 - Funding Information: Open Access funding provided by Aalto University. We gratefully acknowledge financial support from the Academy of Finland and the Foundation for Economic Education. Funding Information: We thank Suomen Asiakastieto Oy and Statistics Finland for the data used in this study. We thank seminar participants at Aalto University for helpful comments and suggestions. Publisher Copyright: © 2022, The Author(s).

PY - 2022/12

Y1 - 2022/12

N2 - Using register data on the Finnish population, we show that both ability (measured with comprehensive school GPA) and educational attainment are relevant predictors of financial distress, even after accounting for childhood family environment. Low GPA is an especially useful predictor of financial distress years later for those who attain a secondary-level education at most. Our results suggest that any societal interventions to mitigate financial distress should particularly focus on low GPA individuals, and especially those unlikely to continue their studies after completing comprehensive school.

AB - Using register data on the Finnish population, we show that both ability (measured with comprehensive school GPA) and educational attainment are relevant predictors of financial distress, even after accounting for childhood family environment. Low GPA is an especially useful predictor of financial distress years later for those who attain a secondary-level education at most. Our results suggest that any societal interventions to mitigate financial distress should particularly focus on low GPA individuals, and especially those unlikely to continue their studies after completing comprehensive school.

KW - Cognitive ability

KW - Educational attainment

KW - Financial distress

KW - Noncognitive ability

UR - https://www.scopus.com/pages/publications/85142475814

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DO - 10.1007/s10603-022-09528-1

M3 - Article

AN - SCOPUS:85142475814

SN - 0168-7034

VL - 45

SP - 655

EP - 672

JO - Journal of Consumer Policy

JF - Journal of Consumer Policy

IS - 4

ER -

Ability, Educational Attainment, and Household Financial Distress

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Ability, Educational Attainment, and Household Financial Distress

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Aalto University Data Hub

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