Economic distress and health: A fixed effects analysis of low‐income persons in Singapore

Using fixed effects regressions, this study examined the transactional effects of different types of economic status on the physical and mental health of low‐income persons in Singapore. Among the economic variables considered, unemployment and arrears had the most significant effects. This signals the physical and psychological distress of being out of work and possessing arrears while income is low. The insignificant effects of poor health on household earnings suggest possible earnings supplementation by other household members. The findings imply the fruitfulness of dually improving employment prospects and health, work activation that takes into consideration mental health effects, increasing affordability of health services in liberal welfare systems, improving mental bandwidth through reducing arrears accounts, and short lag time from application to receipt of assistance. These implications point to a larger question on health and welfare systems in an increasingly uncertain economic environment for households in poverty. Key Practitioner Message: • Employment and health are inter‐related: employment assistance incorporating physical and mental health interventions and vice versa can be more effective than either alone; • Compared with decreasing arrears amounts, reducing the number of arrears can more effectively relieve mental distress; • Effects between economic distress and health materialise quickly; minimising the lag time between application and receipt of assistance will provide great relief.