Measuring resilience to major life events

Etilé, Fabrice, Frijters, Paul, Johnston, David W. and Shields, Michael A. (2021) Measuring resilience to major life events. Journal of Economic Behavior and Organization, 191. 598 - 619. ISSN 0167-2681

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Abstract

There is great interest in understanding who in the population is resilient in the face of major life events, and who is not. In this paper we construct a revealed measure of adulthood psychological resilience by modelling individuals’ responses to ten adverse life events using a dynamic finite mixture regression model applied to 17 years of panel data. Our methodology accounts for non-random selection into events, and differences between individuals in anticipation, immediate response, and speed of adaptation. We find considerable heterogeneity in individuals’ responses to events such as major financial shocks, redundancy and bereavement. We also find that our measure of resilience is correlated with clinical measures of mental health, and that it significantly predicts the psychological response to out-of-sample events. The strongest predictor of our measure of resilience is internal locus of control, which is an individual's belief that life outcomes are under their control.

Item Type:	Article
Official URL:	https://www.sciencedirect.com/journal/journal-of-e...
Additional Information:	© 2021 Elsevier B.V.
Divisions:	Centre for Economic Performance
Subjects:	B Philosophy. Psychology. Religion > BF Psychology H Social Sciences > HV Social pathology. Social and public welfare. Criminology H Social Sciences > HB Economic Theory
JEL classification:	I - Health, Education, and Welfare > I1 - Health > I10 - General C - Mathematical and Quantitative Methods > C2 - Econometric Methods: Single Equation Models; Single Variables > C20 - General C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General
Date Deposited:	29 Oct 2021 08:12
Last Modified:	16 Nov 2024 06:18
URI:	http://eprints.lse.ac.uk/id/eprint/112526

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