The Impact of Household Wealth Gap on Individual's Mental Health

Abstract

Background Improving the individual’s mental health is important for sustainable economic and social development. Although some studies found that household wealth gap may affect individuals’ mental health, few studies have clarified the causal relationship between household wealth gap between mental health in China. This study examines the impact of the household wealth gap on individuals' mental health using data from the 2012–2018 China Family Panel Survey.Methods This study first used the two-way fixed effects model to investigate the impact of household wealth gap on individuals’ mental health. Considering the endogeneity, the two-stage least square and propensity score matching were employed to examine the impact of household wealth inequality on individuals' mental health.Results The results show that the household wealth gap has negative impact on individuals’ mental health. A series of robustness tests support this conclusion. The results of heterogeneity analysis show that the household wealth gap has a greater impact on the mental health of an individual with lower education levels and in rural areas. The results of the mechanism analysis suggest that the household wealth gap may affect individuals' mental health by influencing the individual’s health insurance commitment and neighborhood relations. In addition, the household wealth gap not only significantly negatively affects individuals' mental health in the short term but also in the medium- to long-term.Conclusion These findings suggest that the government should take various measures to narrow the wealth inequality between families, which may effectively improve the mental health of residents.