Page 103 - IJPS-11-2

International Journal of
Population Studies Do female-headed households have poorer finances?

1.1. Financial health and research questions household financial management. The study compares the

The concept of financial health was first introduced by the financial health status of female-headed and male-headed
Center for Financial Services Innovation (CFSI) in 2015. households utilizing four variables: income-expenditure
However, there is still no consensus among researchers and balance, possession of commercial insurance, regular
organizations on its precise definition and measurement. savings accounts, and financial investment products.
Terms such as “financial health,” “financial well-being,” Therefore, based on the question of whether female-
“financial wellness,” and “financial fitness” are often used headed households have poorer financial health than
interchangeably. male-headed households, the study proposes the following
The measurement of financial health varies significantly, four hypotheses:
often focusing on specific aspects of a household’s financial H1: Female-headed households have a statistically different
situation. CFSI developed a framework that includes four balance of income and expenditure compared to male-
main components: spending, saving, borrowing, and headed households.
planning. This framework delineates eight indicators to H2: Female-headed households have a statistically different
evaluate these components: spending less than income, likelihood of having commercial insurance compared
paying bills on time and in full, having sufficient living to male-headed households.
expenses in liquid savings, having sufficient long-term H3: Female-headed households have a statistically
savings or assets, having a sustainable debt load, having different likelihood to save compared to male-headed
a prime credit score, having appropriate insurance, and households.
planning ahead for expense (Parker et al., 2016). H4: Female-headed households have a statistically
different probability of owning investment products
Furthermore, the Consumer Financial Protection compared to male-headed households.
Bureau (CFPB) offers a consumer-driven definition of
financial health (or financial well-being), portraying it as 2. Data and methods
a state of being wherein a person can fully meet current 2.1. Data and sample
and ongoing financial obligations, can feel secure in their
financial future, and is able to make choices that allow them The research employs cross-sectional data from the
to enjoy life (CFPB, 2017). CFPB proposed four elements China Household Finance Survey Project (CHFS2019),
of financial health: having control over day-to-day and a comprehensive national survey carried out in 2017
month-to-month finances; having the capacity to absorb a by the China Household Finance Survey and Research
financial shock; being on track to meet your financial goals; Center at Southwest University of Finance and
and having the financial freedom to make the choices that Economics. This survey covers 29 provinces (regions),
allow you to enjoy life (CFPB, 2017). In 2020, Innovations 343 counties, and 1360 village (residential) committees
for Poverty Action (IPA) described financial health in across China, providing detailed micro-level information
terms of the ability to access funds quickly and affordably, on demographic characteristics, household assets
which we refer to as Access-to-Funds. They proposed three and liabilities, insurance coverage, as well as income
primary concepts that encompass financial health: Access- and expenditure status. The dataset includes 34,643
to-Funds, which is a final outcome construct, and Access- participants from 34,643 households, representing a total
to-Finance and Financial Behavior, which are intermediate of 107,001 residents. The CHFS baseline survey, known
constructs that each incorporates several components for its face-to-face household interviews, ensures both
(Brune et al., 2020). national and provincial representativeness.
Given the variety of indicators proposed by different For this study, the household and individual datasets
researchers and institutions, this study developed four were merged using the household and member IDs.
specific indicators to assess financial health. These Subsequently, a sample of respondents who were
indicators were chosen based on the previously discussed household heads aged between 16 and 80 at the time of
indicators and the variables available in the data used for the interview was selected. This age range was chosen
this study. These indicators include (i) income-expenditure because individuals aged 16 and above, whose primary
balance, (ii) the ability to control debt and risk, such as livelihood source is their labor income, are considered
having emergency insurance in case of sudden loss of to have full civil capacity, whereas individuals over 80
income, (iii) wealth planning and managing future financial are considered to have limited civil capacity. The final
income and expenses, such as having a regular savings sample size of household heads within this age range is
account, and (iv) the ability to invest in the future, such as 33,463.

Volume 11 Issue 2 (2025) 97 https://doi.org/10.36922/ijps.4403