Working From Home, Holding It Together

Abstract

Sole-parent families are New Zealand's most financially fragile household type. They report sharper drops in subjective financial wellbeing during economic shocks than partnered families, and the gap survives standard income, employment, and demographic controls. The behavioural-finance question is what fills the residual: what psychological resource explains why some sole parents weather a sudden labour-market shock while others fall steeply into hardship?

This paper investigates **financial socialisation** — the household practices of money discussion, observation, and modelling that transmit deliberate-planning habits across generations — as a non-cognitive form of household capital that may buffer the lockdown shock. The COVID-19 lockdown timing, exogenous to any individual household's prior financial behaviour, serves as a natural-experiment hook that severs the usual selection-into-resilience channel for the lockdown period.

Using the Te Ara Ahunga Ora Retirement Commission Financial Capability Barometer Survey (n = 4,336, pooled 2018–2020), the existing analysis applies ordinal probit and Oaxaca-Blinder decomposition. The decomposition results show that financial capability and socialisation jointly account for 14.4 percent of the sole–partnered wellbeing gap, and that employment status accounts for a further 19.4 percent. Roughly two-thirds of the gap remains attributable to factors outside individual control — a finding consistent with dual-process accounts of financial decision-making under stress, in which deliberate planning habits transmitted through early financial socialisation protect households when the work-family constraint binds.

We propose extending the existing analysis with a Double-ML estimator that partials out the full Barometer covariate vector using cross-fitted random-forest nuisance functions, and a Causal Forest that recovers the conditional treatment effect by sole-parent subgroup. Together these planned extensions would identify which sole-parent subgroups benefit most from socialisation-based interventions and supply the targeting rule for NZ financial-education policy.

Data & Methods