Study of labour situation, conditions and expectations in relation to financial fragility of households in Spain

Abstract

Financial fragility of households (FFH) has steadily increased over the last few decades, becoming a challenge for the economies of Western countries. Although the literature has analysed various labour determinants, little attention has been paid to labour conditions and expectations, and FFH has often been considered an unidimensional phenomenon. This article relates the FFH in Spain, using a multidimensional and gradual index that adopts both an objective and subjective approach to its measurement, with various labour situations, conditions, and expectations. Using a sample of households from the Survey of Financial Competences, the results show that FFH is higher among the unemployed and the self-employed (compared to those employed by others). Moreover, high volatility in labour expectations is associated with an increase in FFH, regardless of the measurement method.