Financial Well‐Being: A Combined Analysis of Objective and Subjective Factors and Institutional Context

ABSTRACT This study analyses how financial literacy, financial inclusion, and financial resilience relate to financial well‐being, controlling for individual objective characteristics and contextual factors. Relying on the 2020 Organisation for Economic Co‐operation and Development International Survey of Adult Financial Literacy, it uses individual‐level data of 17,789 respondents from 16 countries and applies a multilevel model. Results indicate that financial literacy, financial inclusion, and financial resilience enhance financial well‐being. They also show that men, those who are younger, those with higher levels of education, and those who are employed have comparatively greater financial well‐being. Further, the study accounts for contextual‐level factors by adopting the sociodemographic (S), technological (T), economic (E), and political (P) spheres (STEP) approach, which shows that technological and political spheres are related to financial well‐being. These findings highlight the need for combined analyses of multiple factors to explain financial well‐being, which is deeply entrenched in local contexts with implications for policy issues related to the access to relevant resources that drive higher levels of financial well‐being.