Household Wealth and Individuals’ Mental Health: Evidence from the 2012–2018 China Family Panel Survey

Rui Zhang, Chenglei Zhang (), Jiahui Xia, Dawei Feng and Shaoyong Wu
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Rui Zhang: Department of Economics, Jinan University, Guangzhou 510632, China
Chenglei Zhang: School of Economics & Trade, Guangdong University of Finance, Guangzhou 510521, China
Jiahui Xia: School of Management, Jinan University, Guangzhou 510632, China
Dawei Feng: Institute of Industrial Economics, Jiangxi University of Finance and Economics, Nanchang 330013, China
Shaoyong Wu: Institute of Industrial Economics, Jiangxi University of Finance and Economics, Nanchang 330013, China

IJERPH, 2022, vol. 19, issue 18, 1-18

Abstract: Based on the data from the 2012–2018 China Family Panel Survey, this study examines the impact of household wealth on individuals’ mental health using a two-way fixed effects model. The findings indicate that household wealth exerts a significant positive effect on individuals’ mental health. Furthermore, this study shows that the impact of household wealth on individuals’ mental health is nonlinear but inverted U-shaped. Considering the possible endogeneity problem, this study further examines the effect of household wealth on residents’ mental health using two-stage least squares, and the conclusions remain robust. The results of the heterogeneity analysis indicate that household wealth has a greater impact on the mental health of residents in the low-education group and western region. Furthermore, the results of the mechanisms reveal that household wealth affects mental health by influencing insurance investment and individuals’ labor supply. Moreover, this study finds that household wealth affects individuals’ mental health not only in the short term but also in the medium and long terms. This study provides policy implications for the government toward improving individuals’ mental health.

Keywords: household wealth; mental health; insurance investment; labor supply; medium- and long-term impact (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
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