RELATIONSHIP BETWEEN HOUSEHOLD WEALTH AND FINANCIAL VULNERABILITY IN THE POST-COMMUNIST COUNTRIES OF THE EURO AREA

• Authors: Buleca Ján , Šubová Nikola , Maličká Lenka
• Languages of publication: EN

Abstracts

EN

The paper investigates the relationship between household wealth and financial vulnerability in the euro area member countries using data from the European Union Household Finance and Consumption Survey (HFCS). The instrumental variable regression model based on the two-stage least square method was used to elicit the role of household financial vulnerability in wealth accumulation. To consider different historical development and implementing social policies, the analysis considers the household location (post-communist countries according to the Warsaw Treaty and other European countries with a core in Western Europe). The analysis results emphasise the positive relationship between households’ wealth accumulation and financial vulnerability represented by household indebtedness. Additional variables reflecting the households’ socio-economic and demographic characteristics are statistically significant, too. Debt service-to-income ratio, statuses of employment (employed and self-employed), and age of the reference person squared were driving forces of wealth accumulation, while age of the reference person, number of dependent children, employment status (retired, other), and geographical location lower the level of household wealth.

Keywords

EN

WEALTH; INDEBTEDNESS; FINANCIAL VULNERABILITY; HOUSEHOLDS; POST-COMMUNIST COUNTRIES; EUROPE

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2022
• Volume: 70
• Issue: 7-8
• Pages: 569 – 588

Contributors

author

Buleca Ján

• Technical University, Faculty of Economics, Němcovej 32, 040 01 Košice, Slovak Republic

• https://orcid.org/0000-0002-6613-2167

author

Šubová Nikola

• https://orcid.org/0000-0003-0158-2332

author

Maličká Lenka

• https://orcid.org/0000-0002-5706-5695

Identifiers

DOI

https://doi.org/10.31577/ekoncas.2022.07-8.01