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Financial capability, income and psychological wellbeing

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  • Taylor, Mark P.
  • Jenkins, Stephen P.
  • Sacker, Amanda

Abstract

We examine whether financial capability has impacts on psychological health independent of income and financial resources more generally using a nationally representative survey. British Household Panel Survey data are used to construct a measure of financial capability, which we relate to respondents psychological health using the 12-item General Health Questionnaire. We find that financial capability has significant and substantial effects on psychological health over and above those associated with income and material wellbeing more generally. The sizes of these impacts are considerably larger than those associated with changes in household income. Furthermore having low financial capability exacerbates the psychological costs associated with unemployment and divorce.

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Bibliographic Info

Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2011-18.

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Date of creation: 15 Jul 2011
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Publication status: published
Handle: RePEc:ese:iserwp:2011-18

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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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Fax: 44-1206-873151
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Web page: https://www.iser.essex.ac.uk/
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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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Web: https://www.iser.essex.ac.uk/publications/

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References

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  1. Andrew Clark & Yannis Georgellis & Peter Sanfey, 1999. "Scarring: The Psychological Impact of Past Unemployment," Studies in Economics 9903, Department of Economics, University of Kent.
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  17. Bruno S. Frey & Alois Stutzer, 2000. "Happiness, Economy and Institutions," CESifo Working Paper Series 246, CESifo Group Munich.
  18. Lea, Stephen E. G. & Webley, Paul & Levine, R. Mark, 1993. "The economic psychology of consumer debt," Journal of Economic Psychology, Elsevier, vol. 14(1), pages 85-119, March.
  19. Richard Layte & Bertrand MaƮtre & Brian Nolan & Christopher T. Whelan, 1999. "Income, Deprivation and Economic Strain: An Analysis of the European Community Household Panel," Papers WP109, Economic and Social Research Institute (ESRI).
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Financial capability, income and psychological wellbeing
    by maximorossi in NEP-LTV blog on 2011-08-10 12:48:39
  2. Financial capability, income and psychological wellbeing
    by maximorossi in NEP-LTV blog on 2011-08-07 19:11:07

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