Financial problems and self-reported health status: an analysis for selected European countries

Abstract: This paper investigates the relation between financial difficulties and self-reported health status for adult individuals living in France, Italy and the UK. A set of random effects Probit models is estimated for the probability of reporting poor physical health status, chronic conditions, and limitations in daily life using Eurostat-EU-SILC 2010–2014 longitudinal data for France, Italy, and the UK. All estimates are obtained after controlling for demographic, geographic and socio-economic, as well as for measures of households’ over-indebtedness and housing tenure status individual characteristics. To deal with the potential endogeneity of the indebtedness-health relationship, recursive bivariate random parameters Probit models are estimated. Over-indebtedness showed the largest effect among all economic determinants of health. It is important to protect individuals’ health status during economic recessions by supporting households in financial difficulties to meet their end needs in the short term and by improving access to home ownership.