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Income deprivation and mental well-being: The role of non-cognitive skills

Maite Blázquez Cuesta () and Santiago Budria Rodriguez ()

Economics & Human Biology, 2015, vol. 17, issue C, 16-28

Abstract: We show that the positive relation between income deprivation and mental health is affected by an individual's non-cognitive skills. Income deprivation is operationalized as the Yitzhaki index, i.e., as a function of the sum of income differences between an individual and others in her reference group who are more affluent. Non-cognitive skills are extracted from a Locus of Control questionnaire and the Big Five Inventory, a self-report measurement of an individual in regard to five aspects of personality: conscientiousness, neuroticism, extraversion, agreeableness and open-mindedness. The results, based on the 2002–2010 waves of the German Socio-Economic Panel dataset (SOEP), show that deprivation is negative and significantly related with mental health. However, neurotic individuals are more deprivation-sensitive than are others. Compared to the mean effect, a one standard deviation rise in neuroticism is associated with a deprivation effect that is 36.6% and 51.9% larger among men and women, respectively. Although to a lesser extent, extraverted men and conscientious women are also found to be more deprivation-sensitive than are others, the corresponding figures being 31.1% and 45.9%, respectively. These findings suggest that personality differences should be taken into account in the design of policies, practices and initiatives aimed at alleviating the well-being costs of income deprivation.

Keywords: Mental health; Fixed effects model; Deprivation; Non-cognitive skills (search for similar items in EconPapers)
JEL-codes: C23 D63 I10 I14 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ehbiol:v:17:y:2015:i:c:p:16-28

DOI: 10.1016/j.ehb.2014.11.004

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