The role of financial conditions for physical and mental health. Evidence from a longitudinal survey and insurance claims data

Both theory and empirical evidence suggest that financial conditions are influential for mental health and might contribute to physical health outcomes. Using longitudinal survey data and health insurance claims data from 1209 employees in a large U.S. health insurance company, we examined temporal associations between measures of financial safety, financial capability, financial distress, their summary index (financial security) and six subsequently measured mental and physical health outcomes. We found that financial safety and financial capability were positively associated, while financial distress was negatively associated, with subsequent self-reported measures of physical and mental health, even after controlling for these health measures at baseline and other confounders. Additionally, financial conditions were associated with reduced risk of depression based on health insurance claims data. Financial safety was also associated with anxiety. Policy-makers might consider the introduction of more effective measures for ensuring favorable financial conditions as an important contributor to better population health. Furthermore, policy could encourage teaching adequate financial management techniques and the importance of understanding of long-term consequences of financial decisions, as those might be pivotal for health outcomes. •Survey data and health claims data were linked to study financial conditions and health.•Favorable financial conditions contribute to self-reported mental and physical health.•Favorable financial conditions are associated with reduced risk of depression.•Financial safety is linked with lower anxiety.