Association among income loss, financial strain and depressive symptoms during COVID-19: Evidence from two longitudinal studies

•COVID-19 has major ramifications for both global economy and mental health.•We studied the link between finances and mental health over a month course.•Two independent studies were conducted in the US and Israel.•Financial loss was associated significantly more with depression than with anxiety.•Worsening of income loss was associated with exacerbation of depressive symptoms. COVID-19 pandemic has major ramifications for global health and economy, with growing concerns about economic recession and implications for mental health. Here we investigated the associations between pandemic-related income loss with financial strain and mental health trajectories over a 1-month course, in two independent cohorts. Two independent studies were conducted in the U.S and in Israel at the beginning of the outbreak (March-April 2020, T1; study I: N = 2904, study II: N = 1267) and at a 1-month follow-up (T2; study I: N = 1318, study II: N = 241). Mixed-effects models were applied to assess associations among COVID-19-related income loss, financial strain, and pandemic-related worries about health, with anxiety and depression, controlling for multiple covariates including pre-COVID-19 income. In both studies, income loss and financial strain were associated with greater depressive symptoms at T1, above and beyond T1 anxiety, worries about health, and pre-COVID-19 income. Worsening of income loss was associated with exacerbation of depression at T2 in both studies. Worsening of subjective financial strain was associated with exacerbation of depression at T2 in one study (US). Income loss and financial strain were uniquely associated with depressive symptoms and their exacerbation over time, above and beyond pandemic-related anxiety. In times when a myriad of stressors are affecting mental health worldwide, our findings reveal specific links between the economic impact of COVID-19 and psychiatric outcomes.