Children in households with less than 3 months of savings to cover basic expenses in the event of financial shocks had substantially higher risk of obesity and chronic illness and worse overall health.
The link between family income and childhood health is well known, with poorer health and greater risk for chronic conditions linked to lower income. Now new research presented at the 2016 meeting of the Pediatric Academic Societies in Baltimore, MD, shows that it isn’t the family’s income alone that is associated with children’s medical risks, but also whether there is enough left after bills are paid to save for a “rainy day.”
Researchers led by Adam Schickedanz, MD, a Robert Wood Johnson Clinical Scholar and clinical instructor in pediatrics at the University of California, Los Angeles, presented an abstract of their study, “The Impact of Family Financial Assets and Debt on Child Overall Health, Obesity, and Chronic Illness.”
The investigators examined a nationally representative sample of 2907 children and their families using data collected between 1997 and 2007 from the Panel Study on Income Dynamics, which has tracked economic prosperity and health of American families since 1969. Children in households with less than 3 months of savings to cover basic expenses in the event of financial shocks such as short-term job loss, loss of the use of a car, and unexpected medical bills, had substantially higher risk of obesity and chronic illness and worse overall health than families who were able to set aside money, even if the child’s family was earning an adequate income.
Economic strain caused by this lack of ready financial resources such as savings, rather than low income level defined by the Federal Poverty Level alone, is known as “asset poverty.”
“It’s not just about how much you make--it’s about how much you can keep,” Schickedanz said in a statement. The estimate of the number of Americans living in asset poverty now exceeds 40%, about double the proportion living in income poverty. The longer families lived paycheck-to-paycheck, the worse their children’s health risk, and these strong associations between wealth and child health were found to be independent of other critical factors affecting child health, such as parents’ income, education, race, and age, the investigators found.
Compared with children in wealthier families, those living in asset poverty had a 25% higher chance of worse overall health; each additional year in asset poverty increased the risk by 20%, the study found. Children living in asset poverty were 70% more likely to be obese, and 25% were more likely to have a chronic illness.
More than one-third of families have no savings to cover unexpected expenses and more families are stressed financially. As prices for basic expenses like housing and child care increase, families are not left with much at the end of the month. Schickendanz said he sees the toll it takes on families and children he cares for as a pediatrician; families are on the financial edge with no economic cushion to fall back on and no way to invest in healthier foods, youth sports leagues, college savings accounts, and other important investments in their children’s future health.
The next area of research will evaluate the health impact of financial coaching programs that have been shown to help families in poor communities stretch their incomes further and increase their net worth.