Financial well-being, family financial support and depression of older adults in China

PurposeThis study aims to examine the relationship between objective and subjective aspects of financial well-being, the role of family financial support and depression symptoms of Chinese older adults.Design/methodology/approachThis study used two waves (2015 and 2018) of the Harmonized China Health and Retirement Longitudinal Study. Two financial ratios: the expenditure-to-income ratio and the financial assets ratio, were used to measure the objective aspect of financial well-being. Perceived money management difficulty was employed to measure the subjective aspect of financial well-being. Depression symptoms were measured using the Center for Epidemiologic Studies Depression Scale (CES-D) score. Three analytical models, including an ordinary least squares (OLS) model, an OLS model controlling for lagged depression and a random effects model using panel data, were used to examine the relationships between the objective and subject aspects of financial well-being and depression.FindingsThe results from the three models showed consistent relationships: the expenditure-to-income ratio was a positive contributor, while the financial assets ratio was a negative contributor to depression of older adults in China. The robustness check using binary-coded financial ratio thresholds showed that reaching the suggested thresholds was negatively associated with depression. Perceived money management difficulty contributed positively to depression. The robustness check using the fixed effects model showed no significance of the two ratios, while perceived money management difficulty was positively associated with depression. The insignificance might be due to data limitation (limited waves or rare changes across waves).Originality/valueThe findings indicate that both objective and subjective financial well-being matters in relation to depression symptoms and, therefore, to the overall mental health of the Chinese elderly. Developments in public policies are needed to promote accessible financial services, assistance programs, mental health services and facilities for the older population in China.