Household Debt among Seniors in Canada The Role of Financial Knowledge

Abstract: This research attempts to explain the factors influencing the variation in debt levels among Canada’s senior population with a focus on the role of financial knowledge. This empirical research makes use of an ordered probit model to analyse the factors thought to influence debt levels of seniors in Canada with survey data from the 2014 Canadian Survey of Financial Capabilities. Interestingly, the results reveal that financial literacy has a positive impact on household debt suggesting Canadians aged 55 and over with higher levels of financial knowledge are more likely to have higher levels of debt. Other significant variables include household income, asset levels, budget practices, marital status, and having persons in the household under age 18.

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Authors: Laura Lamb, Anupreet Sharma