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Financial Strain and Health  

Irina Grafova

One of the most fundamental results in health economics is that a greater socio-economic status is associated with better health outcomes. However, the experience of financial pressure and lack of resources transcends the notion of low income and poverty. Families of all income categories can experience financial pressure and lack of resources. This article reviews the literature examining the relationship between financial strain and various health outcomes. There are three main approaches to the measurement of financial strain found in the research literature, each one capturing a slightly different aspect: the family’s debt position, the availability of emergency funds, and inability to meet current financial obligations. There are two main hypotheses explaining how financial strain may affect health. First, financial strain indicates a lower amount of financial resources available to individuals and families. This may have a dual impact on health. On the one hand, lower financial resources may lead to a decrease in consumption of substances such as tobacco that are harmful to health. On the other hand, lower financial resources may also negatively affect healthcare access, healthcare utilization, and adherence to treatment, with each contributing to a decline in health. Second, financial strain may produce greater uncertainty with regard to the availability of financial resources at present as well as in the future, thereby resulting in elevated stress, which may, in turn, result in poorer health outcomes. Examining the relationship between financial strain and health is complicated because it appears to be bidirectional. It is not only the case that financial strain may impact health but that health may impact financial strain. The research literature consistently finds that financial strain has a detrimental impact on a variety of mental health outcomes. This relationship has been documented for a variety of financial strain indicators, including non-collateralized (unsecure) debt, mortgage debt, and the inability to meet current financial obligations. The research on the association between financial strain and health behavior outcomes is more ambiguous. As one example, there are mixed results concerning whether financial strain results in a higher likelihood of obesity. This research has considered various indicators of financial strain, including credit card debt and the inability to meet current financial obligations. It appears that both among adults and children there is no consistent evidence on the impact of financial strain on body weight. Similarly, the results on the impact of financial strain on alcohol use and substance abuse are mixed. A number of significant questions regarding the relationship between financial strain and health remain unresolved. The majority of the existing studies focus on health outcomes among adults. There is a lack of understanding regarding how family exposure to financial strain can affect children. Additionally, very little is known about the implications of long-term exposure to financial strain. There are also some very important methodological challenges in this area of research related to establishing causality. Establishing causality and learning more about the implications of the exposure to financial strain could have important policy implications for a variety of safety net programs.


Religiosity and Development  

Jeanet Sinding Bentzen

Economics of religion is the application of economic methods to the study of causes and consequences of religion. Ever since Max Weber set forth his theory of the Protestant ethic, social scientists have compared socioeconomic differences across Protestants and Catholics, Muslims, and Christians, and more recently across different intensities of religiosity. Religiosity refers to an individual’s degree of religious attendance and strength of beliefs. Religiosity rises with a growing demand for religion resulting from adversity and insecurity or a surging supply of religion stemming from increasing numbers of religious organizations, for instance. Religiosity has fallen in some Western countries since the mid-20th century, but has strengthened in several other societies around the world. Religion is a multidimensional concept, and religiosity has multiple impacts on socioeconomic outcomes, depending on the dimension observed. Religion covers public religious activities such as church attendance, which involves exposure to religious doctrines and to fellow believers, potentially strengthening social capital and trust among believers. Religious doctrines teach belief in supernatural beings, but also social views on hard work, refraining from deviant activities, and adherence to traditional norms. These norms and social views are sometimes orthogonal to the general tendency of modernization, and religion may contribute to the rising polarization on social issues regarding abortion, LGBT rights, women, and immigration. These norms and social views are again potentially in conflict with science and innovation, incentivizing some religious authorities to curb scientific progress. Further, religion encompasses private religious activities such as prayer and the particular religious beliefs, which may provide comfort and buffering against stressful events. At the same time, rulers may exploit the existence of belief in higher powers for political purposes. Empirical research supports these predictions. Consequences of higher religiosity include more emphasis on traditional values such as traditional gender norms and attitudes against homosexuality, lower rates of technical education, restrictions on science and democracy, rising polarization and conflict, and lower average incomes. Positive consequences of religiosity include improved health and depression rates, crime reduction, increased happiness, higher prosociality among believers, and consumption and well-being levels that are less sensitive to shocks.