A growing number of studies have underlined the relationship between socioeconomic status and health. Following that literature, we explore the causal effect of financial hardships on changes in health at older ages. Rather than traditional measures of socioeconomic variables, we study the role of financial hardships. The declarative measurement of financial hardships is particularly relevant for assessing the impact of short-term financial difficulties on health among older adults.
In this study, we use data from the Lausanne cohort 65+. Participants are community-dwelling older adults representative of the population aged 65-70 years in 2004 and living in Lausanne (Switzerland) (n = 1352). We use longitudinal annual data with 11 years of follow-up (2006-16) to estimate dynamic panel models on several indicators measuring older adults' health (self-rated health, number of medical conditions, depressive symptoms, difficulties with daily living activities).
We find evidence of causal effects of financial hardships on self-rated health (coef. = 0.059, P < 0.10) and on depressive symptoms (coef.=0.060, P < 0.05). On the other hand, we find no evidence of causality running from financial hardships to the number of medical conditions and the difficulties in daily living activities.
These results make a contribution to the literature where nearly all previous research on associations between financial hardship and health does not establish causal relationships. Our results support the need to integrate health policies that mitigate the potential adverse health effects of financial hardship for older adults.