Is Financial Capability a Determinant of Health? Theory and Evidence

Sicong Sun () and Yu-Chih Chen ()
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Sicong Sun: The University of Kansas
Yu-Chih Chen: The University of Hong Kong

Journal of Family and Economic Issues, 2022, vol. 43, issue 4, No 9, 744-755

Abstract: Abstract Financial capability, the combination of financial literacy (ability to act) and financial access (opportunity to act), improves people’s access to resources, and thus has the potential to improve health and well-being. This paper positions financial capability under the framework of social determinants of health and discusses theory and presents empirical evidence on the link between financial capability and health. Using data from the RAND American Life Panel and the structural equation modeling approach, we distinguish financial capability from the common socioeconomic position indicators such as income and education. We find that financial capability has a positive and longitudinal effect on health, independent of race/ethnicity, gender, income, education, and employment. This study demonstrates that financial capability is an independent social determinant of health. It can be theoretically and conceptually defined, empirically measured, and can inform clinical interventions that may improve population health and well-being. Implications for future research, practice, and policy are discussed.

Keywords: social determinants of health; financial capability; socioeconomic position; socioeconomic status; financial access; financial literacy (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10834-022-09869-6

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