Bidirectional, longitudinal associations between finance and health - what comes first? Evidence from middle-aged and older adults in Europe

This study examines the bidirectional longitudinal relationship between financial conditions and health among middle-aged and older adults in Europe. Using eight waves (2004-2022) of data from the Survey of Health, Ageing and Retirement in Europe (SHARE), we applied a random intercept cross-lagged panel model (RI-CLPM) to assess reciprocal associations over time between multiple subjective and objective financial and health indicators, while accounting for stable individual differences. Results reveal consistent evidence of mutual influence between financial status and health, though the patterns are asymmetric, with effects from health to financial outcomes generally stronger and more robust. Poor mental and functional health, including depressive symptoms and limitations in daily activities, were associated with deteriorating financial outcomes such as reduced net worth, greater debt, and increased financial strain. Conversely, subjective financial strain, more than income or financial assets, predicted later declines in health, particularly in mental well-being and mobility. Mortgage debt and other liabilities were also consistently associated with poorer outcomes across all health indicators. Policy interventions aiming to improve population health and economic resilience should integrate health support with efforts to reduce perceived financial insecurity. Addressing both domains simultaneously may help break cycles of disadvantage, particularly among older adults vulnerable to financial and health shocks.