Economic inequality and mental health in older adults: Exploring new dimensions of economic well-being

Abstract

Economic inequality is a persistent global issue with profound implications for mental health, particularly among older adults. Previous studies have largely focused on objective economic well-being indicators such as income, employment status, and poverty. While these factors are crucial, emerging evidence suggests that welfare benefits and subjective economic well-being components of what can be deemed augmented economic well-being, may play equally significant roles in shaping psychological health among aging populations. This research explores how disparities in these aspects contribute to psychological distress in older adults. We highlight the role of financial security, government assistance programs, and personal economic satisfaction. We propose policy interventions to mitigate adverse effects and emphasize the need for a holistic approach to economic well-being to improve mental health outcomes in older adults. This study reveals that subjective financial security and access to welfare benefits often surpass income as predictors of mental health. These insights underscore the importance of broadening economic frameworks in aging research and developing integrated policies to enhance financial and psychological well-being.

Key Words: Economic inequality; Mental health; Older adults; Welfare benefits; Subjective economic well-being; Augmented economic well-being; Narrative review; Financial security

Core Tip: By addressing both objective and subjective dimensions of economic well-being, policymakers can develop more effective strategies to support the mental health of older adults in an increasingly unequal world. The integration of financial planning education, equitable access to resources, and improved welfare structures can contribute to reducing the long-term psychological burden of economic insecurity on older individuals.

INTRODUCTION

As societies age, understanding the intersection between economic inequality and mental health among older adults has become increasingly important. In the United States, the proportion of adults aged 65 and older is increasing over time[1]. The prevalence of major depressive episodes among older adults also increased between 2010 and 2019, and 10.2% of older adults aged 65 + lived below the United States federal poverty line in 2022[1,2]. The corona virus disease 2019 pandemic that began in 2020 negatively affected the economic security of older adults in the United States[3]. Traditional economic research on this topic has predominantly focused on income levels, employment history, and poverty rates as key determinants of well-being. However, a growing body of evidence suggests that net worth, access to welfare benefits, and subjective financial security or economic satisfactions-elements of augmented economic well-being-may be more relevant indicators of mental health outcomes in older populations[4-7]. Economic well-being, defined by financial security, access to welfare benefits, and subjective financial satisfaction, significantly influences psychological health[8-12]. By considering economic factors, which have received less attention in understanding mental health, this research aims to provide a more comprehensive perspective on how economic disparities, particularly in net worth, welfare provisions, and subjective economic well-being, shape mental health outcomes, as well as to discuss potential strategies for addressing these challenges. In other words, the current study introduces an innovative perspective by expanding the framework to include augmented economic well-being, which includes factors such as net worth, access to welfare benefits, and subjective financial security. While these dimensions have received less attention in previous studies, they may be even more relevant indicators of mental health outcomes in older populations. This moves beyond a conventional focus on income and employment to explore how economic security, the perceived adequacy of retirement resources, and access to public support programs shape psychological well-being in later life. Thus, this study aims to provide new insights into the ways in which economic inequality, particularly in terms of financial security and subjective well-being, impacts mental health, with the goal of informing future policy and intervention strategies for aging populations.

REVIEW PROCESSES

This study employed a systematic review methodology to critically examine the existing literature on the relationship between economic inequality and mental health among older adults. The review process was designed to ensure the comprehensive and rigorous inclusion of relevant studies, with a clear set of criteria for literature screening. A thorough search of peer-reviewed articles was conducted across several academic databases, including PubMed, PsycINFO, Scopus, and Google Scholar. The search focused on studies published between 2000 and 2024, which allowed for the inclusion of both recent developments and established findings in the field. Keywords such as “economic inequality”, “mental health”, “older adults”, “net worth”, “welfare benefits”, “subjective financial security”, and “subjective economic well-being” were used in various combinations to identify studies relevant to the topic. Studies were included in the review if they met specific eligibility criteria. First, the research had to focus on older adults, defined as individuals aged fifty and above. Second, the studies must have assessed mental health outcomes such as depression, anxiety, stress, or life satisfaction, which are key indicators of psychological well-being. Third, the studies had to examine economic factors, particularly income, wealth, net worth, subjective financial security, or access to welfare benefits, all of which are crucial to understanding economic well-being.

Exclusion criteria were also established to refine the selection. Studies that did not focus on older adult populations or that were primarily concerned with other economic variables unrelated to the central themes of financial security, net worth, or welfare provisions were excluded. Based on this review process, we will compare differences between objective and subjective economic factors and explore the significance of additional elements such as net worth, welfare benefits, and subjective economic well-being-areas that have received less attention in the context of older adults’ mental health. The identified gap in the literature will inform recommendations for future policy directions.

CURRENT STATUS OF ECONOMIC INEQUALITY AND MENTAL HEALTH IN OLDER ADULTS

Objective vs subjective economic well-being

Past research has extensively examined the relationship between objective economic indicators, such as income, employment, and wealth disparities, and mental health outcomes[4,13-16]. Studies have shown that individuals with lower income levels are at heightened risk for depression and anxiety due to financial instability, limited healthcare access, and chronic stress[17-19]. Similarly, unemployment and poverty have been linked to increased psychological distress in older adults[20-23]. While these objective factors are crucial, they do not fully capture the lived experiences of financial insecurity. Augmented economic well-being, which includes subjective financial security and welfare benefits, has emerged as a key determinant of mental health, often surpassing objective indicators in predictive power[7,24].

Net worth and mental health implications

Net worth, including assets and liabilities, is a crucial determinant of long-term financial security. Older adults with lower net worth often experience higher stress levels, leading to an increased risk of mental health problems[8,11,19,20]. Unlike income, which fluctuates, net worth provides a more stable reflection of financial well-being; thus, it may influence an individual’s sense of security and ability to plan for the future[25,26]. Studies indicate that financial insecurity stemming from inadequate savings and asset depletion contributes to chronic psychological distress, negatively affecting overall well-being[27-29]. Additionally, disparities in net worth among various demographic groups increase lifelong financial inequities, further exacerbating mental health concerns in older age[30-32].

Welfare benefits and psychological well-being

Social security programs and welfare benefits play a critical role in mitigating economic disparities among older adults. Countries with robust pension systems and financial assistance programs report lower levels of depression and anxiety in aging populations[9,11,33]. However, gaps in coverage, bureaucratic hurdles, and inadequate benefit levels often leave vulnerable older adults at risk of financial strain and mental health deterioration[34-37]. For instance, individuals receiving inadequate retirement benefits may experience heightened anxiety about their financial future, impacting overall life satisfaction and mental health. Strengthening such programs and ensuring equitable access to benefits can significantly improve mental health outcomes in later life.

Subjective economic well-being and life satisfaction

Beyond objective financial metrics, subjective economic well-being defined by satisfaction with one’s financial preparation for the future, has a significant impact on mental health. Older adults who perceive themselves as financially unprepared for their remaining years may be more likely to experience anxiety and depression, even if they may be classified as having sufficient assets using objective measures[7]. Psychological resilience is higher among those who feel economically secure, regardless of their actual income or wealth status. This suggests that interventions aimed at improving perceptions of financial stability, such as financial education and retirement planning support, could be effective in reducing mental health disparities among older adults. Moreover, some older adults may be satisfied with a certain level of assets, while others may not. That is, cultural and social factors depending on one’s circumstances can shape individual perceptions of economic security, emphasizing the importance of tailored approaches that consider diverse backgrounds and experiences.

THE ROLE OF ECONOMIC WELL-BEING IN MENTAL HEALTH

Economic well-being extends beyond income levels to include financial literacy, access to social welfare programs, and personal satisfaction with economic preparedness. Older adults with stable financial resources, adequate benefits, and positive perceptions of their financial future report better mental health outcomes[6,7]. Economic security fosters a sense of control and reduces stress, thereby mitigating the negative psychological effects of economic inequality. Furthermore, interventions aimed at improving financial decision-making skills and promoting awareness of available resources can play an important role in enhancing economic stability among older adults.

POLICY INTERVENTIONS AND FUTURE DIRECTIONS

Addressing the impact of economic inequality on mental health among older adults requires targeted policy interventions. Potential strategies include: (1) Enhancing financial literacy programs to help older adults manage net worth and economic planning and promote confidence in these areas[38,39]; (2) Implementing community-based support programs to reduce social isolation and economic anxiety[40]; (3) Developing public awareness campaigns that address financial preparedness and psychological well-being in aging populations; (4) Encouraging workplace policies that support financial wellness programs for individuals approaching retirement[41]; (5) Expanding pension and social security benefits to ensure financial stability; and (6) Improving access to welfare programs and reducing administrative barriers[42].

Future research should focus on longitudinal studies to better understand the long-term effects of net worth, welfare benefits, and subjective economic well-being on mental health. Further, comparative studies across different socioeconomic and cultural contexts can provide deeper insights into the mechanisms through which economic inequality affects mental health outcomes in older adults. Developing comprehensive policy solutions that promote financial security and psychological resilience in aging populations is crucial. More interdisciplinary research integrating psychology, economics, and public health can further refine intervention strategies and inform evidence-based policy decisions. The framework outlined in this study is presented in Table 1.

Table 1 Framework of economic inequality and mental health outcomes in aging populations.

Key dimension	Core concept	Mental health implication	Policy implication
Objective economic indicators	Income, employment, and poverty levels	Linked to depression, anxiety, and stress	Expand employment support and poverty alleviation for older adults
Net worth	Assets minus liabilities (long-term financial stability)	Lower net worth chronic stress, insecurity	Promote savings incentives, asset-building policies
Welfare benefits	Access to public support (e.g., social security, pensions)	Strong systems reduce psychological distress	Improve coverage, reduce bureaucratic barriers
Subjective economic well-being	Personal perception of financial adequacy and future security	High satisfaction better life satisfaction and mental resilience	Promote financial literacy and counseling
Augmented economic well-being	Combined view of net worth, welfare access, and subjective financial perception	More holistic, accurate predictor of mental health than income alone	Design cross-disciplinary interventions (economic, psychological, public health)
Cultural and social context	Personal values and background affect perception of financial security	Disparities in perceived well-being despite similar objective resources	Tailor programs to cultural and social backgrounds

CONCLUSION

Economic inequality is a critical determinant of mental health in older adults. While economic disparities persist, enhancing net worth stability, optimizing welfare benefits, and improving subjective economic well-being-key components of augmented economic well-being-through policy measures and social interventions can help mitigate their negative psychological impact. Previous studies have focused primarily on income and employment-related disparities; however, the growing importance of subjective economic perceptions and welfare programs necessitates adopting a broader perspective. A holistic approach to financial security and mental health support is essential for fostering resilience and improving quality of life among aging populations. By addressing both objective and subjective dimensions of economic well-being, policymakers can develop more effective strategies to support the mental health of older adults in an increasingly unequal world. The integration of financial planning education, equitable access to resources, and improved welfare structures can contribute to reducing the long-term psychological burden of economic insecurity on older individuals. In the perspective of cross-disciplinary mechanisms, policy interventions can be more comprehensive and tailored to the unique needs of older adults. For example, a cross-disciplinary program might combine financial planning workshops with psychological counseling, which focuses on coping with financial stress and public health efforts to provide accessible mental health care and community support. This holistic approach would not only address the immediate economic concerns of older adults, but also foster long-term psychological resilience, improving overall well-being. Although the current study proposes a holistic perspective, several limitations should be acknowledged. There are additional dimensions of economic well-being that were not addressed in this review. Therefore, we recommend that future research explores a broader range of factors to deepen the understanding of older adults’ mental health. Moreover, as this study is not based on original data analysis, it lacks empirical evidence. We suggest that future studies support the arguments presented here with findings from statistical analyses.