We hear often about factors that can determine our health – while income is one of them, new research from the University of Kansas has found that “financial capability” (different from income) can in fact be a social determinant of health and those who have it are more likely to have positive health outcomes.

There’s been a lot of research and study about socioeconomic factors of education, employment, income and race and gender and how they impact health.  

This news study found that, separate from those indicators, financial capability – defined as the combination of financial literacy and financial access – can predict health outcomes. 

The results indicate the importance of considering both financial literacy (or the knowledge to act), and financial access (the opportunity to act) in positive financial ways should be both a larger part of health research and policy to improve population health, the authors said.

Sicong “Summer” Sun, assistant professor of social welfare at the University of Kansas, led a study to examine the link between financial capability and health and well being.

“Marginalized people have historically been excluded from mainstream financial services. All individuals and households should have accessible and affordable ways to deposit, save, invest and access affordable credit and insurance products they need,” Sun said. 

“My argument is that improving people’s financial capability is actionable, practical and modifiable in ways that may advance racial, social, economic and health equity in society,” Sun said.

Access was determined by whether people had checking and savings accounts, retirement plans and credit cards. Literacy was determined by whether people were good at math, good at day-to-day financial matters and self-rated financial knowledge as well as how many of six financial literacy questions they answered correctly.

Health was measured by five indicators: life satisfaction, self-rated health, levels of depression, feelings of being worn out, and overall happiness. 

Respondents answered the questions in 2012 and again four years later. The results showed that people who had higher financial capability also had better health outcomes. 

The data also showed respondents who were male, had a college degree, were married, employed and insured had higher levels of financial capability, and that Black, Hispanic and people in other racial groups had lower levels of financial capability, compared to non-Hispanic White participants.

The researchers write that, to their knowledge, the study is the first to examine the link between financial capability and health theoretically and empirically. And the results show the link between the two, supporting the need for further research in the area and its importance in finance and health policy.

In addition to providing empirical evidence of the link between financial capability and health outcomes, Sun said it also suggests the value of social work and public health practitioners and policy makers integrating financial services and health services.

“For example, services could provide financial coaching, credit counseling, financial resources and guidance in clinic settings,” the authors wrote. “Financial assessments could be integrated alongside health and psychological assessments into human service protocols, given the fundamental role of financial capability in shaping people’s physical and psychological health outcomes.”