The role of financial stress in mental health trajectories during COVID-19

Abstract

Using longitudinal data before and during the first six months of the pandemic for a representative sample of Dutch households, we examined the role of financial stress in mental health trajectories during the COVID-19 pandemic. Also, we examined possible relations of financial stress and mental health with households' income, financial buffers, and debts. The data revealed that average mental health did not change during the first six months of the pandemic but showed considerable underlying heterogeneity. Results showed that financial stress trajectories significantly explained the heterogeneity in mental health trajectories. While income did not explain financial stress, debts and insufficient buffers related to increased financial stress, which was in turn negatively related to mental health. We discuss the implications of our findings for mental health care and financial security policy and provide suggestions for future research.