The Impact of Financial Constraints on Quality of Life and Mental Health in the Elderly: Evidence from Spain

Abstract

This study analyzes the association between financial difficulties and quality of life and depression in Spain. We apply extended probit models in order to control for potential endogeneity, in a sample of 1,759 people over 65 years of age. The results show that facing financial difficulties is significantly related to a lower quality of life and a higher probability of depression, particularly for women. Negative expectations about future finances are inversely and significantly related to the individual’s quality of life. These findings suggest that financial advisory and public intervention programs focused on the elderly with financial constraints are necessary to mitigate this negative impact.