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


We here consider the link between individual financial profiles over time and well‐being, as measured by life satisfaction. We in particular look at annual self‐reported financial worsening and improvement information for over 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 being 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 last show that these associations are heterogeneous over the distribution of well‐being.
Original languageEnglish
JournalScandinavian Journal of Economics
Publication statusE-pub ahead of print - 27 Aug 2020


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

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