Measuring resilience to major life events

Fabrice Etilé, Paul Frijters, David Johnston and Michael Shields

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: There is great interest in understanding who in the population is resilient in the face of major life events, and who is not. In this paper we construct a revealed measure of adulthood psychological resilience by modelling individuals’ responses to ten adverse life events using a dynamic finite mixture regression model applied to 17 years of panel data. Our methodology accounts for non-random selection into events, and differences between individuals in anticipation, immediate response, and speed of adaptation. We find considerable heterogeneity in individuals’ responses to events such as major financial shocks, redundancy and bereavement. We also find that our measure of resilience is correlated with clinical measures of mental health, and that it significantly predicts the psychological response to out-of-sample events. The strongest predictor of our measure of resilience is internal locus of control, which is an individual's belief that life outcomes are under their control.

Keywords: major life events; mixture model; panel data; psychological health; resilience (search for similar items in EconPapers)
JEL-codes: C20 C50 I10 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2021-11-01
New Economics Papers: this item is included in nep-cbe and nep-evo
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Citations: View citations in EconPapers (12)

Published in Journal of Economic Behavior and Organization, 1, November, 2021, 191, pp. 598 - 619. ISSN: 0167-2681

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http://eprints.lse.ac.uk/112526/ Open access version. (application/pdf)

Related works:
Journal Article: Measuring resilience to major life events (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:112526

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