Financial security is good for your mental health

Embargoed until: Publicly released:

Better financial security could be good for your mental health, according to researchers at Curtin University. They used data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey to see how people's perception of their economic security affected their mental and physical health. They found economic security was positively associated with mental health because income fulfils immediate, day-to-day needs while wealth, like investments, makes individuals more resistant to financial issues when income is affected, and less stressed about money. The researchers say they did not find a link between financial security and physical health, but more research is needed to see if this stress may influence physical health in the long term.

Journal/conference: Health Sociology Review

Organisation/s: Curtin University

Funder: This work was funded by the Bankwest Curtin Economics Centre (BCEC), Curtin University. This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Paper was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute).

Media release

Income and wealth affect the mental health of Australians, study shows

Australians who have higher incomes and greater wealth are more likely to experience better mental health throughout their lives, new research led by the Bankwest Curtin Economics Centre has found.

The research, published in the journal Health Sociology Review, examined data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey and found both income and wealth were associated with people’s perception of economic security and a range of mental health outcomes, but had no bearing on physical health.

Lead author Dr Garth Kendall, from the Faculty of Health Sciences at Curtin University, said previous research suggested that those with higher incomes had better health and lived longer at a population level.

“There is ample evidence that inequalities in income, such as employment, business, investments and allowances, and net wealth, such as housing, superannuation and financial equities, are increasing in both high and low income countries throughout the world,” Dr Kendall said.

“We wanted to determine whether the socio-economic gap seen in many health outcomes in high-income countries, such as Australia, is best explained by differences in individuals’ perceived economic security as determined by their levels of income and wealth.

“We found that income and wealth both influenced mental health, but a person’s perception of their economic security is better explained by income than wealth. This is because income can be used to purchase goods and services to fund consumption on a day-to-day basis, which is more likely to affect one’s perception of economic security on a day-to-day basis.”

Dr Kendall said policies that seek to reduce unequal access to opportunities to earn income and wealth would likely reduce the socio-economic gap in health that currently exists globally in both low and high-income countries.

“Further research is needed to evaluate the role of economic security in physical health outcomes. Our findings are likely due to the fact that many of the participants were not at an age where they would experience symptoms,” Dr Kendall said.

“For this reason, we have suggested the use of biomarkers, used to measure biological processes, in future research to measure an individual’s underlying pathology as a more sophisticated measure of health.”

The research analysed data from the HILDA (Household, Income and Labour Dynamics in Australia) Survey, which started in 2001 and follows the lives of more than 17,000 Australians each year, limiting their analysis to 2002, 2006 and 2010.

The research, funded by the Bankwest Curtin Economics Centre, was co-authored by Mr Ha Nguyen from the Bankwest Curtin Economics Centre and Professor Rachel Ong ViforJ from the School of Economics, Finance and Property at Curtin University.

The research titled, ‘The association between income, wealth, economic security perception, and health:

a longitudinal Australian study,’ can be found onlinehere.

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