Financial Hardships and Mental Health Crisis: An Examination of Young Adults' Covid-19 Pandemic Experience

Background: The COVID-19 pandemic has caused an unprecedented health and financial crisis, which has disproportionately affected young adults who experienced increased depression and anxiety symptoms. The closing of college campuses as well as loss of internships, jobs, or wages likely have caused financial hardships that compound the mental health difficulties of young adults. While the relationship between poverty and depression is well established, limited research has examined the mental health effects of financial hardship. This study aims to estimate recent levels of financial hardship among young adults, and to explore the association between financial hardship with mental health outcomes in a nationally representative sample of emerging adults.

Data and Methods: A cross-sectional, online survey was administered in January 2021 to emerging adults 18 to 29 recruited through Qualtrics Panels (N = 1,080). Six self-report, retrospective measures of financial hardships were included. These measures assess financial strains since the start of Covid-19 around food security, housing security, bill payment, medical care and prescription, and childcare. The Patient Health Questionnaire-2 (PHQ2) was used to measure depression symptoms in the past 2 weeks. Descriptive statistics and logistic regressions were used to model associations between each type of financial hardship and depression, controlling for demographic and socio-economic variables.

Results. About a quarter (25.43%) of the sample were at risk of having major depressive disorder, while 40% of the sample had experienced at least one of the six financial hardships examined. The most reported hardship was difficulty in paying bills (29.83%, n=321), followed by paying rents or mortgage (21.94%), affording medical care (20.67%), difficulty paying for prescription (15%), and hardship in affording childcare (11%). Multivariate logistic regressions controlling for demographic and socioeconomic covariates indicated that having any financial hardship was linked to 2.69 times higher odds of risk for major depressive disorder (OR = 2.69, z = 6.21). The association between financial hardship and depression was cumulative: as the number of financial hardships increased, the risk of having major depressive disorder increased. Lastly, odds ratios for medical care hardship and prescription filling in predicting depression risk were the largest among all hardship variables.

Conclusions and Implications. This study indicates that financial hardships triggered by the Covid-19 pandemic could put young adults at risk of developing major depressive disorder. The association between financial hardship and depression was robust to adjustment for sociodemographic and clinical confounders, and cumulative with increasing levels of financial hardship. The finding that cumulative financial hardships were significantly associated with increased chance of having major depression symptoms underscores the need to screen financial strains for optimal assessment and specific depression prevention.