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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
Phone: 44-1206-872957
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. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-72, June.
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  4. Brown, Sarah & Taylor, Karl & Wheatley Price, Stephen, 2005. "Debt and distress: Evaluating the psychological cost of credit," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 642-663, October.
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  7. Blanchflower, David G. & Oswald, Andrew J., 2001. "Well-Being Over Time in Britain and the USA," The Warwick Economics Research Paper Series (TWERPS) 616, University of Warwick, Department of Economics.
  8. Mark Taylor, 2011. "Measuring Financial Capability and its Determinants Using Survey Data," Social Indicators Research, Springer, vol. 102(2), pages 297-314, June.
  9. Bridges, Sarah & Disney, Richard, 2010. "Debt and depression," Journal of Health Economics, Elsevier, vol. 29(3), pages 388-403, May.
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  12. Arber, Sara, 1991. "Class, paid employment and family roles: Making sense of structural disadvantage, gender and health status," Social Science & Medicine, Elsevier, vol. 32(4), pages 425-436, January.
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  16. repec:ese:iserwp:2006-08 is not listed on IDEAS
  17. Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 111(473), pages 465-84, July.
  18. repec:ese:iserwp:2006-40 is not listed on IDEAS
  19. Katharina Hauck & Nigel Rice, 2004. "A longitudinal analysis of mental health mobility in Britain," Health Economics, John Wiley & Sons, Ltd., vol. 13(10), pages 981-1001.
  20. Jenkins, Stephen P. & Micklewright, John (ed.), 2007. "Inequality and Poverty Re-Examined," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199218127, October.
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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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