Financial Strain and Mental Health Among Older Adults During the Great Recession

The economic recession has garnered the interest of many scholars, with much attention being drawn to how the recession has affected labor force participation, household wealth, and even retirement decisions. Certainly, the Great Recession has influenced the financial well-being of older adults, but has it had discernible effects on mental health? This study draws on 5,366 respondents from the Health and Retirement Study (2006-2010) to examine objective and subjective measures of financial well-being in the period surrounding the Great Recession. Guided by cumulative inequality theory, this research investigates whether the economic downturn contributed to worsening anxiety and depressive symptoms over a 4-year period. Results from linear fixed effects models reveal that decreases in objective financial resources were associated with increased financial strain during the Great Recession. Unlike the objective indicators, however, financial strain was a strong and robust predictor of worsening mental health between 2006 and 2010. Building on prior research, this study elucidates the factors that shape financial strain and provides evidence that the Great Recession not only affected the financial well-being of older adults but also had adverse effects on mental health.