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

Author

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  • 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 worsening having the larger influence. 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, 2020. "Living in the Shadow of the Past: Financial Profiles and Well-Being," PSE Working Papers halshs-02497067, HAL.
    • Handle: RePEc:hal:psewpa:halshs-02497067
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02497067v1
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    Cited by:

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    2. Luo, Jianbo, 2021. "Happiness adaptation to high income: Evidence from German panel data," Economics Letters, Elsevier, vol. 206(C).
    3. 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.
    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..
    6. Thi Thao Nguyen & Kim Huong Nguyen & Nicholas Rohde, 2024. "Economic Disparities, Life Events, and the Gender Mental Health Gap," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(3), pages 1053-1100, September.

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    Keywords

    Financial improvement; financial worsening; time profiles; well- being; HILDA;
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