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Money Matters: Adults

Does money in adulthood affect adult outcomes? A systematic review.

Kerris Cooper and Kitty Stewart

This research analyses a range of existing studies and finds strong evidence that a boost in income during adulthood makes people happier and reduces mental health problems.

The full report and summary can be available here from the Joseph Rowntree Foundation who funded this research.

There is ample evidence that adults with lower incomes tend to have worse outcomes including worse health, lower life expectancy and lower subjective wellbeing than individuals with more. But is money in adulthood itself important? Or are these relationships driven by other factors such as higher levels of education, underlying personality traits or the long-term impact of childhood circumstances? This study reviews the evidence, focusing on research that tested whether the relationship between money and outcomes in adulthood is causal.

Key Points

  • The review identified 54 studies that were able to test the effect of money on adult outcomes. This evidence suggests that money in adulthood does itself matter for wider adult outcomes, but this is clearer for some outcomes than for others.

  • There is strong evidence that additional financial resources make people happier and reduce mental health problems such as depression and anxiety.

  • Money also gives people more choices in a range of areas of life, including decisions about relationships, employment and education.

  • Increases in women’s income appears to reduce domestic violence, though only two studies looked at this.

  • The evidence on physical health is unclear. There is strong evidence that increases in resources improve the health behaviour of parents, but more income can lead to less healthy behaviours, such as drinking and smoking more, for the rest of the population. Evidence on the impact on health outcomes, such as obesity and life expectancy, is also very mixed.

  • Researchers’ focus on causal methods, and on resources in adulthood, inevitably narrowed the focus of this review. Included studies largely examine fairly small and short-term changes in resources or large windfalls in unusual circumstances. The impact of permanent or life-course differences in resources is nearly impossible to capture using these methods.

  • The mixed findings for physical health suggest that changing health outcomes late in life is hard, and underline the importance of investing early in childhood to affect long-term drivers of health and well-being. But the positive effects for other outcomes, especially mental health, show us that money in adulthood also matters, with implications for social security benefits and wage policies.