Trends in financial satisfaction among middle-age and old-age Americans, 1972-1996

Structural differences in life satisfaction in a U.S. adult sample across age

OBJECTIVE

Many studies investigating age-related mean differences in life satisfaction disregard potential differences in the structure of the life satisfaction construct. Because developmental tasks at different life stages vary and thus the salience of specific life domains (e.g., health, finances, relationships, etc.) might differ, life satisfaction might differ between age groups in its underlying structure and meaning.

METHOD

To address this issue, we investigated the covariance structure of life satisfaction as measured by the Satisfaction with Life Scale (SWLS) and the domains of health satisfaction and financial satisfaction with local structural equation modeling. We analyzed data from 8341 U.S. citizens between the ages of 30 and 97 who participated in the Panel Study of Income Dynamics. Furthermore, we explored the association of respondents' health and financial status with life satisfaction.

RESULTS

Both the SWLS and domain items were found to be invariant across age. The health and financial status accounted for small proportions of variance in overall life satisfaction and the respective domain satisfactions significantly at all ages.

CONCLUSION

The current analysis indicates that across the adult age range, general life satisfaction is qualitatively the same, and health and financial satisfaction are equally integrated into overall life satisfaction.

Health, subjective financial situation and well-being: a longitudinal observational study

BACKGROUND

An individual's financial situation is a key contributor to their overall well-being. Existing research has examined the direct economic consequences of changes in health upon out-of-pocket healthcare expenditure, participation in the labour force and potential earnings. There is also research exploring an individual's concern about their subjective financial situation regardless of the level of their income or work status on their health. In contrast, this paper conducts a causal analysis of the effects of general and mental health on an individual's subjective evaluation of their financial situation controlling for their work status and income. This is of importance because current health policy in the United Kingdom (UK) stresses the role of health as an asset which can mediate the wider flourishing of individuals. Moreover, subjective financial situation comprises a key component of well-being now being measured and sought in social welfare policy.

METHODS

Fixed effects instrumental variable panel data regression analysis is applied to 25 years of longitudinal data, from 1991, drawn from the harmonised British Household Panel Survey (BHPS) and Understanding Society Survey (USS).

RESULTS

Improved general health and reduced mental illness both improve the subjective financial situation of males and females. However, these affects diminish across older cohorts of males and females.

CONCLUSIONS

Investing in and improving general and mental health can improve the subjective financial situation and hence well-being of individuals. The targeting of health also needs to take account of an individuals' life-stage.

Use of an Income-Equivalence Scale to Understand Age-Related Changes in Financial Strain

Income-equivalence scales (IES) provide distinct advantages over poverty indices to adjust family income for differences in family size, including improved specification of hypothesized causal relationships involving objective measures of economic well-being. In a novel IES application, cancer patients' out-of-pocket health costs are adjusted for differences in family income and size and, along with five other subindices, contribute to an overall index of "objective family financial stress." Age-related changes are modeled simultaneously within relationships between overall objective family financial stress and subjective patient perceptions about financial strain. Among the findings, the impact of age on one area of subjective financial strain, "difficulty paying bills," is negative and curvilinear. Regardless of adjusted out-of-pocket costs, as age advances, patients appear increasingly likely to accommodate to financial stress by reporting less difficulty paying bills. This phenomenon could serve to mask and isolate older adults who are foregoing needed yet unaffordable medical care and prescriptions.

Gender’s Effect on the Relationships Linking Older Americans’ Resources and Financial Satisfaction

This article tests the assumptions that the effect of resources on the financial satisfaction of older Americans is consistent (1) for different measures of income and wealth and (2) for men and women. Data are from a weighted subsample of those 65 and older from Waves I (1986) and II (1989) of the Americans’ Changing Lives Panel Study. Multivariate analyses contradict both assumptions with the following statistically significant findings: (1) Financial satisfaction in 1986 and not receiving food stamps are stronger predictors of financial satisfaction for men, whereas having interest and retirement/pension incomes are more important for women; and (2) a lowered number of chronic ailments is more important for women, whereas having a surviving spouse is more important for men. Findings support both George’s ideas of “control” and “illusion of control” and Moen’s ideas about gender-specific patterns of status transitions.

Trends in financial satisfaction: does poverty make a difference?

Gerontological studies on financial satisfaction have been limited by the dearth of longitudinal research and the lack of research that includes the concept of poverty. In order to bridge these gaps, this longitudinal study examines and compares the intracohort and intercohort effects on financial satisfaction trends by poverty status among Americans age 45 and above, using data from the General Social Surveys. The results suggest that for both the poor and the non-poor, changes in financial satisfaction trends are mostly due to strong negative intercohort effects, indicating that younger cohorts are less satisfied financially than the older ones. There appears to be a significant difference in the intercohort effects of financial satisfaction trends between the poor and the non-poor. However, such difference can be accounted for by the differences in the effects of education and social comparison (or relative deprivation) on financial satisfaction between the poor and the non-poor.

Correlates of financial satisfaction

The objectives of this study are to 1) assess the effects of major correlates of global subjective well-being on financial satisfaction, and 2) use empirical data to present the consequences of violating basic regression assumptions. Analyzing data from the General Social Surveys, 1972-1996 (Davis & Smith, 1996a) this study found that among Americans age forty-five and above, most of the major correlates of global subjective well-being show similar effects on financial satisfaction. The study's findings confirm a nonlinear effect of income on financial satisfaction. Comparing results from different analytical methods, this study also alerts researchers to the importance of taking into account the level of measurements of study variables, which have tended to be overlooked by previous subjective well-being research.