2014 Conference

The Great Recession affected several people in different situations. It is important to understand, that while financial challenges are expected during tough economic times, there are some groups that are more vulnerable than others due to certain risk factors. Using the 2007-2009 panel of the Survey of Consumer Finances, this study examined such risk factors using income-expense deficit as an indicator of financial stress. Specifically, factors included different age groups, status and changes in marital status, income, the presence of children, health condition, housing, work status, occupation, and industry of occupation. Gender, race, education, and spending habit in 2007 were treated as control variables. Those whose income decreased, were renting, self-employed, had more kids, and were in technical, sales or service occupations, or working in agriculture, retail, or service industries were more likely to be financial stressed in 2009. While a significant number of respondents had reported increased number of children, changes in marital status, work status, occupation, and industry, none of these shifts significant influenced the likelihood of being financial stressed after the start of the Great Recession. These results are important for public policy, financial advisors, and educators so that targeted programs can be developed for vulnerable groups.