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Psychological Resilience to Major Socioeconomic Life Events

Author

Listed:
  • Etilé, Fabrice

    (INRA-CORELA)

  • Frijters, Paul

    (London School of Economics)

  • Johnston, David W.

    (Monash University)

  • Shields, Michael A.

    (Monash University)

Abstract
Understanding who in the population is psychologically resilient in the face of major life events, and who is not, is important for policies that target reductions in disadvantage. In this paper we construct a measure of adult resilience, document its distribution, and test its predictability by childhood socioeconomic circumstances. We use a dynamic finite mixture model applied to 17 years of panel data, and focus on the psychological reaction to ten major adverse life events. These include serious illness, major financial events, redundancy and crime victimisation. Our model accounts for nonrandom selection into events, anticipation of events, and differences between individuals in the immediate response and the speed of adaptation. We find considerable heterogeneity in the response to adverse events, and that resilience is strongly correlated with clinical measures of mental health. Resilience in adulthood is predictable by childhood socioeconomic circumstances; the strongest predictor is good childhood health.

Suggested Citation

  • Etilé, Fabrice & Frijters, Paul & Johnston, David W. & Shields, Michael A., 2020. "Psychological Resilience to Major Socioeconomic Life Events," IZA Discussion Papers 13063, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp13063
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    File URL: https://docs.iza.org/dp13063.pdf
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    Cited by:

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    2. Benno Torgler, 2021. "Behavioral Taxation: Opportunities and Challenges," CREMA Working Paper Series 2021-25, Center for Research in Economics, Management and the Arts (CREMA).
    3. Awaworyi Churchill, Sefa & Munyanyi, Musharavati Ephraim & Prakash, Kushneel & Smyth, Russell, 2020. "Locus of control and the gender gap in mental health," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 740-758.
    4. Sebastian Himmler & Jannis Stöckel & Job van Exel & Werner B. F. Brouwer, 2021. "The value of health—Empirical issues when estimating the monetary value of a quality‐adjusted life year based on well‐being data," Health Economics, John Wiley & Sons, Ltd., vol. 30(8), pages 1849-1870, August.
    5. Sebastian Himmler & Jannis Stöckel & Job van Exel & Werner Brouwer, 2020. "The Value of Health - Empirical Issues when Estimating the Monetary Value of a QALY Based on Well-Being," SOEPpapers on Multidisciplinary Panel Data Research 1101, DIW Berlin, The German Socio-Economic Panel (SOEP).
    6. Awaworyi Churchill, Sefa & Smyth, Russell, 2021. "Locus of control and energy poverty," Energy Economics, Elsevier, vol. 104(C).

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    More about this item

    Keywords

    non-cognitive skills; major life events; psychological resilience; childhood; panel data; mixture model;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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