Financial distress and inequalities in wellbeing across 13 European countries

By Claire Niedzwiedz

Governments are increasingly recognising the wellbeing of their citizens as a policy priority.  But in times of economic difficulty the welfare ‘safety net’ is often reduced, which may adversely affect the wellbeing of those most threatened by financial insecurities. Focusing on social inequalities in wellbeing across different countries – as we do in our latest paper – is therefore crucial.

By alf.melin, Flickr. Creative Commons (CC BY-SA 2.0)In the paper we look at how experiencing financial distress in early old age helps to explain inequality in wellbeing between the most and least advantaged groups (according to their socioeconomic circumstances measured from childhood to early old age). Using data from 13 countries taking part in the Survey of Health, Ageing and Retirement in Europe (SHARE) we were able to see how relationships differed according to the type of welfare state. The paper, summarised here, builds on our previous work demonstrating varying levels of socioeconomic inequalities in quality of life across Europe.


4676086254_fcfe08268a_bWe used data from around 18,000 people who were aged 50 to 75 years, which we considered to represent early old age. Wellbeing was measured using life satisfaction and CASP-12 (which measures people’s feelings of control, autonomy, self-realisation and pleasure in life). Financial distress was also assessed during early old age by asking participants about their ability to make ends meet. We then developed a measure of an individual’s life course socioeconomic position from survey questions which asked about a number of aspects of people’s socioeconomic environment across the life course including, for example, their childhood conditions (such as the number of books they had when they were aged 10 years and the occupation of the main breadwinner), education level and wealth. This measure is an adaptation of the slope or relative index of inequality, which can be used to quantify inequalities in health and wellbeing across the life course (further methodological details can be found here).  The 13 countries were grouped into four welfare ‘regimes’: Scandinavian (Denmark and Sweden), Bismarckian (Austria, Belgium, France, Germany, Netherlands, Switzerland) Post-communist (Czech Republic and Poland) and Southern (Greece, Italy, Spain). These welfare state groupings were
considered to be relatively stable over the participants’ life time and reflect the shared policies, political traditions and values.

Key findings

We found that:

  • Increased socioeconomic advantage over the life course was related to higher wellbeing in early old age.
  • In Scandinavian countries, an individual’s life course socioeconomic position was less strongly related to their wellbeing.
  • Financial distress was more common in Post-communist and Southern countries and was related to lower wellbeing in all welfare states.
  • Financial distress explained a large part of the relationship between life course socioeconomic position and wellbeing.
  • It attenuated the association for life satisfaction by around 34% among women in the Post-communist regime and 72% in the Scandinavian regime.

Conclusions & Implications

The results of our study suggest that welfare states with stronger safety nets were more effective at narrowing life course socioeconomic inequalities in wellbeing. They also suggest that reducing financial strain in early old age could contribute to better wellbeing and therefore it may not be too late to intervene to try to improve the wellbeing of older people. In addition, reducing sources of financial support may have a detrimental effect on overall wellbeing and also on its distribution across the socioeconomic gradient. Therefore, it is essential that inequalities in wellbeing are continually monitored as the generosity of many European welfare states is reduced and conditionality increased.

You can read the full paper published in the American Journal of Public Health here.

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