Financial Vulnerability Among Households: Structural, Behavioural, and Psychosocial Dimensions from a Systematic Literature Review

The study of household financial vulnerability has often centred on structural dimensions such as income levels, indebtedness, and exposure to economic hardship. Recent research, however, underscores that vulnerability extends beyond these measures and is equally shaped by behavioural patterns, psychosocial dynamics, and the institutional settings that determine household resilience. Drawing upon a systematic review of 281 studies, this chapter integrates insights from economics, sociology and behavioural finance to advance a multidimensional interpretation of financial fragility. It further introduces the notion of the ‘hidden middle class’ and advances the Household Financial Vulnerability Continuum (HFVC) as a unifying framework. Through the integration of structural, behavioural and psychosocial perspectives, the chapter seeks to refine conceptual understanding while offering practical implications for policies addressing household fragility across varied contexts.

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