Determinants of mental and financial health during COVID-19: Evidence from data of a developing country

Abstract

Mental and emotional issues are the top-level concerns of public health worldwide. These issues surged during Coronavirus (COVID-19) pandemic due to varied medical, social, and personal reasons. The social determinants highlighted in the literature mainly focus on household solutions rather than on increasing the financial wellbeing of individuals, especially for the most vulnerable groups where the psychological distress coming from the social inequalities cannot be entirely treated. Hence, this study attempts to familiarize the financial capability (the financial literacy, attitude, skills and behavior required for effective financial management) construct into public health domain in the times of COVID-19 as a determinant of psychological distress, and also explores the role of gender in it. The study uses Ordinary Least Square (OLS) regression analysis and employs mental distress questions and Organization for Economic Cooperation and Development (OECD) 2018 financial capability toolkit to collect data from a large sample of households from all over Pakistan. It is inferred that the higher the financial capability, the lower the financial and mental distress during COVID-19. Additionally, females are less financially knowledgeable, depict poor financial behaviors, and face more psychological issues than their counterparts. Age and education are also linked to mental stress during COVID-19. Finally, gender plays a moderating role in financial behavior, and financial and mental stress of households. As evident, COVID-19 is not going away soon hence the findings are relevant for policymakers to proactively plan for the pandemic's upcoming waves and help people be better financially equipped to fight against this or any upcoming crisis, and achieve better mental and physical health.