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Study: Wealth Shocks Shorten Life

Losing your life’s savings can shorten your lease on life, according to a new study.

Indeed, while there is a body of research that indicates a connection between lower incomes and poorer health, this new report indicates that having wealth and losing it is almost as bad for your life expectancy as never having wealth in the first place.

According to study author study author Lindsay Pool, an assistant professor of preventive medicine at Northwestern University’s Feinberg School of Medicine in Chicago, those experiencing a negative wealth shock (defined as a loss of 75% or more of total net worth over a 2-year period) or asset poverty (defined as zero or negative total net worth at study entry) were at risk; specifically, they were found to be 50% more likely to die. That’s about as large a mortality effect as getting diagnosed with heart disease, according to the report, which was just published in the Journal of the American Medical Association.

The researchers analyzed data from 8,700 participants in the U.S. National Institute on Aging health and retirement study tracking the health and financial circumstances of a representative group of Americans between ages 51 and 61 when the project started in 1992. The authors excluded factors likely to trigger a sudden loss of wealth, such as preexisting illness, loss of employment or marital disruption, in order to isolate the health impact of the wealth shock itself.

That said, the likely causes of the increased death risk fall into two categories:


  • the direct health impact of rapid impoverishment, such as increasing stress hormone levels, loss of psychological balance, and excessive drinking and other substance abuse; and

  • no longer being able to pay for adequate medical treatment.


The research notes that a negative wealth shock in late middle and older age may lead to permanent change in economic status because income-earning potential is reduced and thus there is less ability to recover from the shock financially. On the other hand, it cautions that little is known about potential long-term health consequences of negative wealth shocks, and that because medical expenses from major illness can be a primary trigger of negative wealth shock in middle-aged and older adults, it can be difficult to disentangle the effect of negative wealth shocks on subsequent health outcomes from the effect of the medical illness itself.

The researchers found that among U.S. adults ages 51 years and older, loss of wealth over two years was associated with an increased risk of all-cause mortality – but concluded that further research is needed to better understand the possible mechanisms for this association and determine whether there is potential value for targeted interventions.

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