Individual Differences in the Impact of Socio-Economic Events on Health and Well-Being

Funder: Economic and Social Research Council
Amount: £376,527
Behavioural Science Centre Member: Professor Alex Wood (CI) and Dr Christopher Boyce (CI)
Other Researchers: James Banks (CI; University of Manchester and Institute of Fiscal Studies) and Eamonn Ferguson (CI; University of Nottingham)

People's well-being, consisting of, for example, their health, happiness and overall satisfaction with life, is influenced by a wide variety of life events (e.g., income increases, marriage, and unemployment) as well as changes in the society in which they live (e.g., changes in national income and how equally that income is distributed). Our programme of research will show (a) the type of person who loses or gains the most well-being when these events take place, and (b) the psychological reasons as to why people's well-being changes after such events. Showing why, and for whom, socioeconomic events can have a large impact on well-being is important for understanding basic questions such as why some people are happier or more depressed than others. Such research can also help in understanding the impact of policy (for example, who will suffer the most if society becomes more unequal). We use already collected datasets which provide tens of thousands of people's responses, over several years, to questionnaires about themselves and their levels of well-being.

These well-being responses, as well as detailed medical information about their biological functioning, can be linked to specific events that people have encountered in their lives. We use these datasets to ask five key research questions, each with both theoretical and policy implications;

1. Do well-being reactions to socio-economic events (such as marriage or unemployment) depend on a person's personality prior to the event occurring? If so, this would suggest that certain people have predictably stronger or weaker reactions depending on their existing psychological characteristics, indicating who may need the most support following life events.

2. Whilst personality by definition represents quite stable psychological characteristics, here we ask whether personality changes in predictable and meaningful ways following life events. If personality is something that changes, then this suggests some potential for policy discussions and applied research to focus on how to create the conditions that allow for positive personality development.

3. Is a person's health and well-being influenced by their level of income, or rather by how their income ranks amongst other people (e.g., those in the same community)? If the latter is the case, then this has implications for understanding why the relationship between income and well-being exists, and may offer specific solutions as to how to reduce the negative effects of having a low income.

4. Does losing one pound of income have a proportionally greater impact on well-being than gaining one pound of income? Although intuitively "yes", calculations of the impact of income on well-being currently assume that income gains and losses impact equally on a person or a nation's well-being. This question has relevance to policies that prioritise the avoidance of income losses over stimulating income gains.

5. Do people have lower levels of well-being in less equal societies? Here, we explore whether the influence of positive and negative life events on well-being are different depending upon the level of inequality in a society, and whether this occurs due to low feelings of basic fairness and trust. This would contribute to debates as to the relative costs of allowing income to become more unequally distributed. The integration within our programme is the focus on showing how psychological characteristics are important for understanding how socio-economic circumstances influence well-being across these five broad areas. Our aim in answering these questions is to:

(a) contribute new answers to old theoretical questions in several fields

(b) encourage interdisciplinary collaboration in understanding the impact on well-being of socio-economic events

(c) feed into important policy debates

(d) suggest an increased role for psychologists to work alongside other social scientists in informing policy in this area.

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