IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/halshs-01485989.html
   My bibliography  Save this paper

Modelling Heterogeneity in the Resilience to Major Socioeconomic Life Events

Author

Listed:
  • Fabrice Etilé

    (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, INRA - Institut National de la Recherche Agronomique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Paul Frijters

    (CEPR - Center for Economic Policy Research - CEPR, LSE - London School of Economics and Political Science)

  • David W. Johson

    (Monash University [Malaysia])

  • Michael A. Shields

    (Monash University [Malaysia])

Abstract

Using a novel, dynamic finite mixture model applied to 12 years of nationally representative panel data, we explore individual heterogeneity in the total psychological response (our measure of resilience) to ten major adverse life events, including serious illness, redundancy and crime victimisation. Importantly, this model takes into account that individuals are not randomly selected into adverse events, that some events are anticipated in advance of their occurrence, and that the immediate psychological response and the speed of adaptation may differ across individuals. Additionally, we generate a ‘standardised event' in order to document the distribution of general resilience in the population. We find considerable heterogeneity in the response to adverse events, with the total psychological loss of people with low resilience being several times larger than the average loss. We also find that resilience is strongly correlated with clinical measures of mental health, but only weakly correlated with cognitive and non-cognitive traits. Finally, we find that resilience in adulthood to some extent is predictable by childhood socioeconomic circumstances; the strongest predictor we identify is good childhood health.

Suggested Citation

  • Fabrice Etilé & Paul Frijters & David W. Johson & Michael A. Shields, 2017. "Modelling Heterogeneity in the Resilience to Major Socioeconomic Life Events," Working Papers halshs-01485989, HAL.
  • Handle: RePEc:hal:wpaper:halshs-01485989
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01485989
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-01485989/document
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Andrew E. Clark & Yannis Georgellis, 2013. "Back to Baseline in Britain: Adaptation in the British Household Panel Survey," Economica, London School of Economics and Political Science, vol. 80(319), pages 496-512, July.
    2. Buddelmeyer, Hielke & Powdthavee, Nattavudh, 2016. "Can having internal locus of control insure against negative shocks? Psychological evidence from panel data," Journal of Economic Behavior & Organization, Elsevier, vol. 122(C), pages 88-109.
    3. Andrew E. Clark & Conchita D’Ambrosio & Simone Ghislandi, 2016. "Adaptation to Poverty in Long-Run Panel Data," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 591-600, July.
    4. Graham, Liam & Oswald, Andrew J., 2010. "Hedonic capital, adaptation and resilience," Journal of Economic Behavior & Organization, Elsevier, vol. 76(2), pages 372-384, November.
    5. Marco Caliendo & Deborah A. Cobb-Clark & Arne Uhlendorff, 2015. "Locus of Control and Job Search Strategies," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 88-103, March.
    6. Flavio Cunha & James J. Heckman, 2009. "The Economics and Psychology of Inequality and Human DEvelopment," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 320-364, 04-05.
    7. Andrew E. Clark, 2016. "Adaptation and the Easterlin Paradox," Creative Economy, in: Toshiaki Tachibanaki (ed.), Advances in Happiness Research, edition 1, chapter 0, pages 75-94, Springer.
    8. Paul Frijters & David W. Johnston & Michael A. Shields, 2011. "Life Satisfaction Dynamics with Quarterly Life Event Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 190-211, March.
    9. Andrew E. Clark & Ed Diener & Yannis Georgellis & Richard E. Lucas, 2008. "Lags And Leads in Life Satisfaction: a Test of the Baseline Hypothesis," Economic Journal, Royal Economic Society, vol. 118(529), pages 222-243, June.
    10. Cobb-Clark, Deborah A. & Schurer, Stefanie, 2012. "The stability of big-five personality traits," Economics Letters, Elsevier, vol. 115(1), pages 11-15.
    11. Norris, Fran H. & Tracy, Melissa & Galea, Sandro, 2009. "Looking for resilience: Understanding the longitudinal trajectories of responses to stress," Social Science & Medicine, Elsevier, vol. 68(12), pages 2190-2198, June.
    12. Galatzer-Levy, Isaac R. & Bonanno, George A., 2012. "Beyond normality in the study of bereavement: Heterogeneity in depression outcomes following loss in older adults," Social Science & Medicine, Elsevier, vol. 74(12), pages 1987-1994.
    13. Deborah A. Cobb‐Clark & Stefanie Schurer, 2013. "Two Economists' Musings on the Stability of Locus of Control," Economic Journal, Royal Economic Society, vol. 0, pages 358-400, August.
    14. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    15. Hiroyuki Kasahara & Katsumi Shimotsu, 2009. "Nonparametric Identification of Finite Mixture Models of Dynamic Discrete Choices," Econometrica, Econometric Society, vol. 77(1), pages 135-175, January.
    16. Andrew Clark & Fabrice Etilé & Fabien Postel-Vinay & Claudia Senik & Karine Van der Straeten, 2005. "Heterogeneity in Reported Well-Being: Evidence from Twelve European Countries," Economic Journal, Royal Economic Society, vol. 115(502), pages 118-132, March.
    17. Case, Anne & Fertig, Angela & Paxson, Christina, 2005. "The lasting impact of childhood health and circumstance," Journal of Health Economics, Elsevier, vol. 24(2), pages 365-389, March.
    18. Arouri, Mohamed & Nguyen, Cuong & Youssef, Adel Ben, 2015. "Natural Disasters, Household Welfare, and Resilience: Evidence from Rural Vietnam," World Development, Elsevier, vol. 70(C), pages 59-77.
    19. Oswald, Andrew J. & Powdthavee, Nattavudh, 2008. "Does happiness adapt? A longitudinal study of disability with implications for economists and judges," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1061-1077, June.
    20. Brown, Sarah & Durand, Robert B. & Harris, Mark N. & Weterings, Tim, 2014. "Modelling financial satisfaction across life stages: A latent class approach," Journal of Economic Psychology, Elsevier, vol. 45(C), pages 117-127.
    21. Merve Cebi, 2007. "Locus of Control and Human Capital Investment Revisited," Journal of Human Resources, University of Wisconsin Press, vol. 42(4).
    22. Hogg, Daniel & Kingham, Simon & Wilson, Thomas M. & Ardagh, Michael, 2016. "The effects of relocation and level of affectedness on mood and anxiety symptom treatments after the 2011 Christchurch earthquake," Social Science & Medicine, Elsevier, vol. 152(C), pages 18-26.
    23. Vendrik, Maarten C.M., 2013. "Adaptation, anticipation and social interaction in happiness: An integrated error-correction approach," Journal of Public Economics, Elsevier, vol. 105(C), pages 131-149.
    24. Daniel Aaronson & Bhashkar Mazumder, 2008. "Intergenerational Economic Mobility in the United States, 1940 to 2000," Journal of Human Resources, University of Wisconsin Press, vol. 43(1).
    25. Stephen Pudney, 2008. "The dynamics of perception: modelling subjective wellbeing in a short panel," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 171(1), pages 21-40, January.
    26. Flavio Cunha & James J. Heckman, 2009. "The Economics & Psychology of Inequality and Human Development," Working Papers 200905, Geary Institute, University College Dublin.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sebastian Neumann‐Böhme & Arthur E. Attema & Werner B. F. Brouwer & Job N. J. A. van Exel, 2021. "Life satisfaction: The role of domain‐specific reference points," Health Economics, John Wiley & Sons, Ltd., vol. 30(11), pages 2766-2779, November.
    2. Asheim, Geir B. & Bossert, Walter & D'Ambrosio, Conchita & Vögele, Claus, 2020. "The measurement of resilience," Journal of Economic Theory, Elsevier, vol. 189(C).
    3. Frijters, Paul & Krekel, Christian & Ulker, Aydogan, 2020. "Machiavelli versus concave utility functions: should bads be spread out or concentrated?," LSE Research Online Documents on Economics 108421, London School of Economics and Political Science, LSE Library.
    4. Frijters, Paul & Krekel, Christian & Ulker, Aydogan, 2023. "Should bads be inflicted all at once, like Machiavelli said? Evidence from life-satisfaction data," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 1-27.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Etilé, Fabrice & Frijters, Paul & Johnston, David W. & Shields, Michael A., 2020. "Psychological Resilience to Major Socioeconomic Life Events," IZA Discussion Papers 13063, Institute of Labor Economics (IZA).
    2. Etilé, Fabrice & Frijters, Paul & Johnston, David W. & Shields, Michael A., 2021. "Measuring resilience to major life events," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 598-619.
    3. Powdthavee, Nattavudh & Stutzer, Alois, 2014. "Economic Approaches to Understanding Change in Happiness," IZA Discussion Papers 8131, Institute of Labor Economics (IZA).
    4. Buddelmeyer, Hielke & Powdthavee, Nattavudh, 2016. "Can having internal locus of control insure against negative shocks? Psychological evidence from panel data," Journal of Economic Behavior & Organization, Elsevier, vol. 122(C), pages 88-109.
    5. David W. Johnston & Claryn S. J. Kung & Michael A. Shields, 2021. "Who is resilient in a time of crisis? The importance of financial and non‐financial resources," Health Economics, John Wiley & Sons, Ltd., vol. 30(12), pages 3051-3073, December.
    6. Kaiser, Caspar, 2020. "People do not adapt. New analyses of the dynamic effects of own and reference income on life satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 494-513.
    7. Andrew E. Clark, 2016. "Adaptation and the Easterlin Paradox," Creative Economy, in: Toshiaki Tachibanaki (ed.), Advances in Happiness Research, edition 1, chapter 0, pages 75-94, Springer.
    8. Andrew E. Clark & Conchita D’Ambrosio & Simone Ghislandi, 2016. "Adaptation to Poverty in Long-Run Panel Data," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 591-600, July.
    9. Kaiser, Caspar, 2018. "People do not adapt to income changes: A re-evaluation of the dynamic effects of (reference) income on life satisfaction with GSOEP and UKHLS data," INET Oxford Working Papers 2018-07, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    10. Diriwaechter, Patric & Shvartsman, Elena, 2018. "The anticipation and adaptation effects of intra- and interpersonal wage changes on job satisfaction," Journal of Economic Behavior & Organization, Elsevier, vol. 146(C), pages 116-140.
    11. Antoine Marsaudon, 2022. "Do Hospital Stays Modify Locus of Control?," De Economist, Springer, vol. 170(2), pages 257-277, May.
    12. Antoine Marsaudon, 2019. "Do Health Shocks Modify Personality Traits? Evidence from Locus Of Control," PSE Working Papers halshs-01976868, HAL.
    13. Tushar Bharati & Thea Harpley Green, 2021. "Age at school transition and children’s cognitive and non-cognitive outcomes," Economics Discussion / Working Papers 21-06, The University of Western Australia, Department of Economics.
    14. Andrew E. Clark, 2018. "Four Decades of the Economics of Happiness: Where Next?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(2), pages 245-269, June.
    15. Eva M. Berger & Luke Haywood, 2016. "Locus of Control and Mothers’ Return to Employment," Journal of Human Capital, University of Chicago Press, vol. 10(4), pages 442-481.
    16. Andrew E. Clark & Luis Diaz-Serrano, 2023. "Do individuals adapt to all types of housing transitions?," Review of Economics of the Household, Springer, vol. 21(2), pages 645-672, June.
    17. Schurer, Stefanie, 2014. "Bouncing Back from Health Shocks: Locus of Control, Labor Supply, and Mortality," IZA Discussion Papers 8203, Institute of Labor Economics (IZA).
    18. Andrew E Clark & Rong Zhu, 2023. "Taking Back Control? Quasi-Experimental Evidence on the Impact of Retirement on Locus of Control," Working Papers halshs-04335808, HAL.
    19. Andrew E. Clark & Conchita D'Ambrosio & Rong Zhu, 2021. "Living in the Shadow of the Past: Financial Profiles and Well‐Being," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(3), pages 910-939, July.
    20. Stutzer, Alois & Frey, Bruno S., 2012. "Recent Developments in the Economics of Happiness: A Selective Overview," IZA Discussion Papers 7078, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Psychological Health; Resilience; Life Events; Childhood; Panel; Data; Mixture Model;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:halshs-01485989. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.