Behavioural Characteristics and Financial Distress



both countries enjoyed strong economic growth and low unemployment rates during the
period.
4 Finally, O’Donnell (2009) compares the overall results for financial capability be-
tween Ireland and the UK and finds a high degree of correlation between the results in both
countries for the managing money and keeping track of one’s personal finances sections of
the surveys.

Table 5 examines the demographic and economic characteristics of respondents accord-
ing to their distress level in the total sample. The age distribution of persons reporting
financial distress is shown in the first panel, and shows that younger people tend to report
some degree of financial distress more often than older people. For example, 30.4 per cent
of 18-24 year olds in the sample report that they struggle from time-to-time to keep up with
bills and credit commitments, relative to 12.8 per cent of the 65+ year olds. I also find that
a slightly higher proportion of females report financial distress relative to males (Panel 2).
In Panel 3 I show that married people report financial distress less often than non-married
people, while Panel 4 shows that less educated respondents tend to report financial distress
more often than more educated individuals.

Financial distress responses also vary by income, as shown in Panel 5, where I divide
respondents into quintiles based on their income level. The lowest income quintile captures
the poorest 20 per cent of respondents in the sample, where for example, 10.2 per cent
of this group report that it is a constant struggle to keep up with their bills and credit
commitments. The highest income quintile captures the richest 20 per cent of the sample,
where for example 3.1 per cent of this group report a constant struggle with bills and credit
commitments. The table also shows that respondents with outstanding debt more often
report being in financial difficulties relative to those with no outstanding debt. Finally, in
Panel 7 I show the work status of the sample, and find that unemployed respondents more
often report that they are financially distressed relative to individuals with another work
status.

4The unemployment rate in both countries was in the range of 4-5 per cent at the time that the surveys
were conducted, while real GDP grew, on average, by close to 1 per cent per quarter in the year leading up
to the surveys in both countries.

13



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