Household Wealth and Individuals’ Mental Health: Evidence from the 2012–2018 China Family Panel Survey

Abstract

Based on the data from the 2012–2018 China Family Panel Survey, this study examines the impact of household wealth on individuals’ mental health using a two-way fixed effects model. The findings indicate that household wealth exerts a significant positive effect on individuals’ mental health. Furthermore, this study shows that the impact of household wealth on individuals’ mental health is nonlinear but inverted U-shaped. Considering the possible endogeneity problem, this study further examines the effect of household wealth on residents’ mental health using two-stage least squares, and the conclusions remain robust. The results of the heterogeneity analysis indicate that household wealth has a greater impact on the mental health of residents in the low-education group and western region. Furthermore, the results of the mechanisms reveal that household wealth affects mental health by influencing insurance investment and individuals’ labor supply. Moreover, this study finds that household wealth affects individuals’ mental health not only in the short term but also in the medium and long terms. This study provides policy implications for the government toward improving individuals’ mental health.

Negative wealth shocks in later life and subsequent cognitive function in older adults in China, England, Mexico, and the USA, 2012–18: a population-based, cross-nationally harmonised, longitudinal study

“…Our findings are largely consistent with existing studies on absolute values of wealth and cognitive health outcomes in later life in each of the four countries included here. 3 Positive associations between household wealth and depressive symptoms, a psychosocial factor that might link wealth shocks and cognition, have also been observed in China, 27 England, 28 Mexico, 29 and the USA. 30 Importantly, we observed an association between negative wealth shocks and cognitive function in later life in the USA and China, but not in England or Mexico.…”