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The impact of wealth and income on the depression of older adults across European welfare regimes

Published online by Cambridge University Press:  20 June 2019

Dimitrios Kourouklis
Affiliation:
Center for Industrial Economics (CERNA), MINES ParisTech, Paris, France
Georgia Verropoulou*
Affiliation:
Department of Statistics & Insurance Science, University of Piraeus, Piraeus, Greece Centre for Longitudinal Studies, UCL Institute of Education, London, UK
Cleon Tsimbos
Affiliation:
Department of Statistics & Insurance Science, University of Piraeus, Piraeus, Greece
*
*Corresponding author. Email: gverrop@unipi.gr

Abstract

This paper examines the impact of wealth and income on the likelihood of depression among persons aged 50 or higher in four European regions characterised by differences in the standards of living and welfare systems. To address possible effects, data from Wave 6 of the Survey of Health, Ageing and Retirement in Europe (SHARE) have been used. Based on a sample of 60,864 persons resident in 16 European countries and a binary indicator of depression, probit and instrumental variable probit models were employed, the latter of which deal with issues of endogeneity and omitted variable bias. The findings show differences in the prevalence of depression across Europe, favouring the more affluent North/Western countries. Further, there is a difference in the role and the magnitude of the effect of income and wealth across different regions. First, though both measures exhibit a measurable effect, their impact is greater in the poorer Central/Eastern and Southern regions; this divide is more pronounced for wealth. Second, income seems to have a stronger effect compared to wealth in all instances: hence, it would seem that liquidity is more important among Europeans aged 50 or higher than assets. Nevertheless, neither income nor wealth are important among persons aged 65 or higher in Nordic countries which may be partly attributable to a more equitable welfare system.

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Article
Copyright
Copyright © Cambridge University Press 2019

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