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Living in the Shadow of the Past: Financial Profiles and Well‐Being

Author

Listed:
  • Andrew E. Clark

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Conchita d'Ambrosio

    (uni.lu - Université du Luxembourg = University of Luxembourg = Universität Luxemburg)

  • Rong Zhu

    (Flinders University [Adelaide, Australia])

Abstract

We here consider the link between individual financial profiles over time and well‐being, as measured by life satisfaction. We in particular look at annual self‐reported financial worsening and improvement information for over 25,000 individuals in Australian panel data from 2002 to 2017. We first find that satisfaction falls (rises) with a contemporaneous major financial worsening (improvement), with the largest correlation being with financial worsening. Second, the experience of these financial events in the past continues to be linked to current well‐being. Last, only the order of financial‐improvement spells relates to well‐being: a given number of past years where finances deteriorated has the same association with current well‐being whether the deterioration occurred in one continuous spell or was interrupted. We last show that these associations are heterogeneous over the distribution of well‐being.

Suggested Citation

  • Andrew E. Clark & Conchita d'Ambrosio & Rong Zhu, 2021. "Living in the Shadow of the Past: Financial Profiles and Well‐Being," PSE-Ecole d'économie de Paris (Postprint) halshs-02973081, HAL.
    • Handle: RePEc:hal:pseptp:halshs-02973081
    DOI: 10.1111/sjoe.12426
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    Cited by:

    1. David W. Johnston & Olena Stavrunova, 2021. "Subjective Wellbeing Dynamics," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 518-529, December.
    2. Blázquez, Maite & Moro-Egido, Ana I., 2023. "The impact of financial insecurity on self-reported health: Europe in cross-national perspective," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1123-1137.
    3. Luo, Jianbo, 2021. "Happiness adaptation to high income: Evidence from German panel data," Economics Letters, Elsevier, vol. 206(C).
    4. Nicole Black & Angela Jackson & David W. Johnston, 2022. "Whose mental health declines during economic downturns?," Health Economics, John Wiley & Sons, Ltd., vol. 31(1), pages 250-257, January.
    5. Maite Blázquez & Ana I. Moro Egido, 2020. "Financial insecurity and subjective well-being. Europe in crossnational perspective," ThE Papers 20/07, Department of Economic Theory and Economic History of the University of Granada..

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