Financial Strain in the United Kingdom

Declan French

No 16-02, CHaRMS Working Papers from Centre for HeAlth Research at the Management School (CHaRMS)

Abstract: UK households have been exposed to economic recession followed by a government programme of austerity. As a result, many households have been under severe financial strain. Using a large UK household survey, we find that the feeling of not being able to cope financially matters for individual mental and physical health even when controlling for individual heterogeneity and potential reverse causation. We develop a theoretical model which brings some of the rigour of lifetime economic decision-making models to bear on our understanding of the causes of financial strain. Our estimation results for this model highlight that shocks to how we view our financial situation are more important for subjective financial well-being than not having enough income or being liquidity constrained. Recent welfare and pension reforms intended to reduce budget deficits may have exacerbated financial strain and increased public health care costs. In the case of disability benefits reform, we find that the uncertainty generated by an opaque process of reassessment caused financial strain to increase even when households were not materially worse off.

Keywords: Financial strain; Health; Permanent income (search for similar items in EconPapers)
JEL-codes: I10 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2016-05
New Economics Papers: this item is included in nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
ftp://ftp.qub.ac.uk/pub/users/repec/qub/charms/MS_WPS_CHARMS_16_02.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Failed to connect to FTP server ftp.qub.ac.uk: A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.

Related works:
Journal Article: Financial strain in the United Kingdom (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qub:charms:1602

Access Statistics for this paper

More papers in CHaRMS Working Papers from Centre for HeAlth Research at the Management School (CHaRMS) Contact information at EDIRC.
Bibliographic data for series maintained by Mark McGovern ( this e-mail address is bad, please contact ).