Abstract
BackgroundAn individual’s financial situation is a key contributor to their overall well-being. Existing research has examined the direct economic consequences of changes in health upon out-of-pocket healthcare expenditure, participation in the labour force and potential earnings. There is also research exploring an individual’s concern about their subjective financial situation regardless of the level of their income or work status on their health. In contrast, this paper conducts a causal analysis of the effects of general and mental health on an individual’s subjective evaluation of their financial situation controlling for their work status and income. This is of importance because current health policy in the United Kingdom (UK) stresses the role of health as an asset which can mediate the wider flourishing of individuals. Moreover, subjective financial situation comprises a key component of well-being now being measured and sought in social welfare policy.MethodsFixed effects instrumental variable panel data regression analysis is applied to 25 years of longitudinal data, from 1991, drawn from the harmonised British Household Panel Survey (BHPS) and Understanding Society Survey (USS).ResultsImproved general health and reduced mental illness both improve the subjective financial situation of males and females. However, these affects diminish across older cohorts of males and females.ConclusionsInvesting in and improving general and mental health can improve the subjective financial situation and hence well-being of individuals. The targeting of health also needs to take account of an individuals’ life-stage.
Highlights
An individual’s financial situation is a key contributor to their overall well-being
For the general health variable on its own, for the whole sample, and for males and females, the positive coefficients show that improved health leads to improvements in subjective financial situation
Conclusions the socio-determinants of health (SDH) are well known, and there has been research that has examined the impact of subjective financial well-being on health, there has been no research on the reverse impacts of health on the subjective financial situation of individuals, which is linked to their wellbeing
Summary
An individual’s financial situation is a key contributor to their overall well-being. This paper conducts a causal analysis of the effects of general and mental health on an individual’s subjective evaluation of their financial situation controlling for their work status and income. This is of importance because current health policy in the United Kingdom (UK) stresses the role of health as an asset which can mediate the wider flourishing of individuals. The association between access to health and objective economic inequality has been investigated broadly through a focus on three issues: access to out-of-pocket healthcare expenses; restricted participation in the labour market; and, reduced potential for earnings. Poor health is associated with other costs of illness, such as transportation and configuration of home care environments, in the US [2]
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