Financial Stress and COVID-19: A Comprehensive Analysis of the Factors Associated with the Pandemic

Abstract

The COVID-19 pandemic introduced unprecedented challenges for households globally, serving as a precursor to and trigger for financial stress. This study examined the associations across various factors thought to be associated with financial stress (a psychological syndrome) resulting from the COVID-19 pandemic. Using survey data collected in 2019 (n = 997) and 2021 (n = 988), propensity score matching and hierarchical linear modeling were employed to identify the association between financial stress and the pandemic. Results indicated that financial stress increased during the COVID-19 pandemic. Three covariate groups, including financial characteristics, health status, and socio-demographic characteristics, were found to be associated with financial stress levels. The primary contribution of this paper lies in offering a comprehensive understanding of how the dynamics of financial stress evolve with shifting macroeconomic events. This paper serves as a framework to employ a comprehensive financial stress measure and matched samples at various data points. Findings from this study contribute to the existing literature on financial well-being, financial stress, and societal outcomes associated with global health events while providing implications for policy and practice.