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Journal Article

Financial capability and psychological health

Authors

Publication date

2011

Summary

Financial capability is receiving increasing interest among policy makers, who wish to reduce problem debt and welfare dependency and increase savings and general skills. We examine whether financial capability has impacts on psychological health independent of income and financial resources more generally using a nationally representative survey. Data from the British Household Panel Survey 1991–2006 are used to construct a measure of financial capability, which we relate to respondents’ psychological health using the 12-item General Health Questionnaire. Estimates from within-group panel data models indicate that financial capability has significant and substantial effects on psychological health over and above those associated with income and material wellbeing more generally. For men, having low financial capability has an effect larger than that associated with being unemployed, while for women it is similar to that of being divorced. Furthermore having low financial capability exacerbates the psychological costs associated with unemployment and divorce, while high financial capability reduces these costs.

Published in

Journal of Economic Psychology

Volume and page numbers

32 , 710 -723

DOI

http://dx.doi.org/10.1016/j.joep.2011.05.006

ISSN

16

Subjects

Household Economics, Well Being, and Finance

Links

http://serlib0.essex.ac.uk/record=b1646364~S5

Notes

Albert Sloman Library Periodicals *restricted to Univ. Essex registered users*


Related publications

  1. Financial capability, income and psychological wellbeing

    Mark P. Taylor, Stephen P. Jenkins, and Amanda Sacker

    1. Household Economics
    2. Well Being
    3. Finance
  2. Financial capability and wellbeing: evidence from the BHPS

    Mark P. Taylor, Stephen P. Jenkins, and Amanda Sacker

    1. Income Dynamics
    2. Well Being
    3. Finance

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