Academic journal article New Zealand Journal of Psychology

The Impact of Poverty on Wellbeing during Midlife

Academic journal article New Zealand Journal of Psychology

The Impact of Poverty on Wellbeing during Midlife

Article excerpt

Midlife, defined here between the ages of 40 and 64, is the life stage where many people have become established in their family and employment roles. It is often characterised by the latter years of parenting and the early years of grandparenting. Income earning tends to peak during this period and asset accumulation usually reaches its zenith just prior to retirement. Key bodily functions and abilities that worked well during early midlife begin to manifest their limitations during the latter stages of midlife.

Midlife is typically the period prior to retirement transitions and as such sets the stage for wellbeing in later life. The current midlife group is studied here, because included within it is the large post-War 'baby boomer cohort' who are about to become eligible for National Superannuation (currently 65 years in New Zealand) in greatly increased numbers than qualifiers in previous years. The median age of New Zealanders is projected to rise from 36 years at present to 46 years in 2051, and the percentage of those aged 65 or over will increase from 12 percent to 26 percent in 2051 (Statistics New Zealand 2007). Understanding the characteristics of these cohorts and how well they are prepared for later life is important, if the country is to ensure their wellbeing and the wellbeing of subsequent cohorts. This paper focuses on the associations of the various components of economic poverty with wellbeing within the midlife group.

Poverty during midlife is explored through objective data, such as income, assets, housing tenure and poverty thresholds, and through subjective data such as personal assessments of financial adequacy, satisfaction with economic living standards and satisfaction with life overall. The associations between these data provide insights into the impacts of poverty on wellbeing during this life stage and provide evidence for a number of policy challenges.

Economic Living Standards and Wellbeing

Subjective wellbeing in the literature is often a synonymous term for quality of life and primarily concerns subjective assessments of satisfaction and/or happiness. Some studies focus primarily on the relationship between wellbeing and income, while others explore the relationships between wellbeing and asset accumulation, socio-economic status and health. As the studies described below show, positive relationships between income, socio-economic status and wellbeing are often, but not always, apparent.

Generally speaking, the midlife cohort is better off than all other cohorts in both cross-sectional and longitudinal studies. In an analysis of the New Zealand Household Economic Survey database, Perry (2008) showed that those aged 45-64 years made up the largest proportion (36%) of the top quintile of equivalised disposable household income (1). Further, they have the second largest proportion (28%) in the second highest quintile. These relative positions were maintained both before and after housing costs were taken into account. However, although the midlife cohort had a greater proportion living in households on higher incomes, there was still a substantial proportion living in households on lower incomes (17% in the lowest quintile and another 13% in the quintile above that).

These financial circumstances appear to translate into a similar distribution of living standards for midlife New Zealanders. The New Zealand Living Standards Report showed that 72% of those aged 45-64 years had a 'comfortable' or better living standard, second only to the 65 and over age group, with 81%. However, 17% lived in some form of hardship (Jensen et al., 2006).

A number of international studies have explored the relationship between income and wellbeing, and between social class and wellbeing. A study of more than 10,000 Swedish adults between the ages of 20 and 64 years found that those with a good financial position had a slightly higher wellbeing score than those with a less positive financial situation (Hansson, Hilleras & Forsell, 2005). …

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