1. Do financial resources in adulthood make a difference to adult outcomes? Kerris Cooper and Kitty Stewart SPA Conference July 15 2014

2. Outline Background and overall project Methods Findings Limitations and Concluding thoughts

3. Background Does money itself matter for wider outcomes? New Labour’s focus on income poverty criticised Field Report (2010) – increased investment in services for children rather than focusing on family income Government consultation on child poverty measurement – less prominence to income measures, incorporating measures of worklessness, parental education and family breakdown

4. The Project Aim: To review the evidence which seeks to test whether household financial resources have a causal impact on wider outcomes: for children (including intermediate outcomes) for working-age adults for older people Split into two reviews: Does money affect children’s outcomes? (published October 2013) Do financial resources in adulthood make a difference to adult outcomes? (in progress)

5. How much does money matter for… Children’s Outcomes: -Cognitive and school achievement -Social, behavioural and emotional development -Physical health -Subjective wellbeing -Social inclusion Intermediate Outcomes: -Home learning environment -Parenting behaviours -Parental physical and mental health -Nutrition and material hardship -Spending on children’s items Adult Outcomes: -Health and health behaviour -Subjective well-being (mental health, depression, happiness, life satisfaction) -Relationship quality and stability -Educational choices and outcomes -Employment -Social and political participation -Crime (involvement as perpetrator or victim)

6. Findings from Report on Children’s Outcomes Overall strong evidence money has a causal impact on children’s wider outcomes. Additional income has a bigger effect on households with less.

7. The Challenge  Confounding factors for adults: education; personal characteristics (determination, deferred gratification, emotional intelligence).  Reverse causation for adults: poor mental or physical health results in lower income  Untangling long-term and short-term effects: income in childhood may have affected health and education which affect income in adulthood… Financial resources Wider Outcomes Causal?

8. Methods 1) ‘Credible causal methods’: - Randomised Controlled Trials - Natural experiments - Instrumental variables - Fixed effects (or other techniques that measure changes in resources and outcomes within households) 2) Systematic review principles (But publication bias) (And less comprehensive approach for adults) Systematic searches Published search terms Search log Inclusion criteria

9. Outcomes searched for -Health and health behaviour -Subjective wellbeing (including mental health, depression, happiness) -Relationship quality and relationship stability -Education -Employment -Social and political participation -Crime (involvement as perpetrator or victim)

10. Top 2,000 search results exported (top 500 of unpublished results exported).

11. Inclusion Criteria Credible causal methods. English abstract EU or OECD Post-1988 and unpublished post-2009 Stated aim to test effect of financial resources on one or more outcome of interest Financial resources measured at individual or household level.

12. Studies screened based on abstract only N = 28,787 Studies screened using full articles N = 188 Final studies included N = 61 28,599 studies excluded 22 studies snowballed 155 studies excluded Stage 1 screening Stage 2 screening 6 studies from children’s report 48,880 studies exported from search results

13. Our Final Studies - by Results Nature of outcomes Studies including outcome Negative effect No effect Positive effects Mixed results Depends on interpretation Happiness and Mental health1712122 Health behaviours94 41 Obesity (including food stamps)12453 Health outcomes11344 Relationship stability (new unions / relationship dissolution) 8 2 6 Relationship satisfaction3 12 Domestic abuse3 12 Political participation2 11 Social participation211 Employment6 31 2 Education3 3 Fertility1 1 Total61

14. Our Final Studies – By Evidence Type Nature of outcomeExperiments of which lotteries/ inheritances InstrumentsLongitudinalTotal Happiness534817 Health behaviour7429 BMI/Obesity (incl Food Stamps studies)435312 Health outcomes742211 Relationship stability42228 Relationship satisfaction33 Domestic violence1113 Social and political participation123 Education33 Employment4226 Fertility11

15. Our Final Studies - by Country Country Number of studies Australia1 Canada2 Germany4 Mexico2 Sweden1 The Netherlands1 UK6 UK and US1 US42 US, Germany and EU countries1 Total61

16. Does money buy happiness? ‘Happiness’ measured as depression, life satisfaction, mental wellbeing (General Health Questionnaire) or happiness 12 out of 17 studies find increases in money improve happiness/life satisfaction or reduce poor mental health [NB not much evidence on how long these effects last.]

17. Does money improve health behaviour or health outcomes? Evidence much more mixed. Health behaviours (e.g. drinking and smoking): negative effects overall, though different for parents Obesity/BMI (including studies on US Food Stamps Programme): half negative, half positive Health outcomes: even split between positive effect, negative effect, no effect. N.B. these studies are only getting at short-term changes in financial resources in adulthood – accumulation across the life course is important

18. Does money affect relationship quality or stability? Differences by whether women or men receive the income (women’s income matters more on the whole) Difficult to interpret what counts as ‘positive’ or ‘negative’ effect 6 out of 8 studies find increase in income increases relationship transitions i.e. both dissolutions and new unions 2 out of 3 studies finds increase in money increases relationship satisfaction 2 out of 3 studies find increase in money reduces domestic violence

19. Areas where we identified less evidence Political participation (2): mixed Social participation (2): mixed Employment (6): mixed – half find no effect Education (3) : all positive Fertility (1): positive Remember that the adult study is less comprehensive than the children study! There is likely to be more evidence out there.

20. Limitations Limited to short-term changes in resources and therefore not picking up effects of resources across the life course – important when assessing evidence on health. Lottery studies – unique events – effects may be different to other changes in resources Inheritance studies – generalisable to rest of population? Evidence mostly from the US.

21. Concluding thoughts More mixed than evidence for children… But strong evidence money matters for adults’ mental health (fits well with children’s report findings re mechanisms) And perhaps more choice in relationship status Implications for policy:  If concerned about adults’ wellbeing, should be concerned about financial resources in adulthood  Current context of austerity and welfare reform

22. Full report on children’s outcomes available at http://www.jrf.org.uk/publications/does-money-affect-childrens- outcomes http://www.jrf.org.uk/publications/does-money-affect-childrens- outcomes Report on adult outcomes to be published this Autumn. Email: k.m.cooper@lse.ac.ukk.m.cooper@lse.ac.uk @CooperKerris and @kittyjstewart

23. Things to consider before publication… How important are effect sizes? (for wellbeing studies at least) Do we need to weight the studies instead of vote count?

24. Concluding thoughts Evidence more mixed than for children’s outcomes Clear positive effects on mental health, depression and happiness Very mixed evidence on health and health behaviour More choice with regard to fertility, employment and education? (few studies though) The limitations of what we are looking at here is starker: relatively short- term effect of short-term changes. But only part of the story. Health results, for example, may point to the limits of what can be achieved with cash in the short term, but don’t tell us about the importance of money over the life course. Implications for importance of adults’ financial resources Cameron’s concern with wellbeing? Resources in childhood dominates the policy debate, but evidence suggestive of immediate importance of benefits and wages, for example. If concerned about adults’ wellbeing at least, should be concerned about adult financial resources.

25. Lack of consensus about whether money itself affects wider outcomes Government Child Poverty Strategy 2011 – need for a move away from “a narrow focus on income measures” Frank Field as child poverty ‘tsar’: more investment in parenting support, home environment, high quality childcare; less in benefits. Poverty and income inequality projected to rise to 2020 as a result of austerity measures (IFS 2013). Motivation

26. Critiques of income as central to poverty Child poverty strategy 2011 – need for a move away from “a narrow focus on income measures” Government consultation on measuring child poverty Suggested a multidimensional indicator reflecting Worklessness Drug and alcohol dependency Parental health Problem debt Unstable family environments