Living in the shadow of the past: financial profiles and well-being

Andrew Clark, Conchita D'Ambrosio, Rong Zhu

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)


We consider the link between individual financial profiles over time and well-being, as measured by life satisfaction. In particular, we look at annual self-reported financial worsening and improvement information for more than 25,000 individuals in Australian panel data from 2002 to 2017. We first find that satisfaction falls (rises) with a contemporaneous major financial worsening (improvement), with the largest correlation seen to be with financial worsening. Second, the experience of these financial events in the past continues to be linked to current well-being. Last, only the order of financial-improvement spells relates to well-being: a given number of past years where finances deteriorated has the same association with current well-being whether the deterioration occurred in one continuous spell or was interrupted. We show that these associations are heterogeneous over the distribution of well-being.

Original languageEnglish
Pages (from-to)910-939
Number of pages30
JournalScandinavian Journal of Economics
Issue number3
Early online date27 Aug 2020
Publication statusPublished - Jul 2021


  • financial improvement
  • financial worsening
  • time profiles
  • well-being
  • Financial improvement


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