Cross-national insights into the relationship between wealth and wellbeing: a comparison between Australia, the United States of America and South Korea
ABSTRACT The positive relationship between wealth and wellbeing has received considerable attention over the last three decades. However, little is known about how the significance of wealth for the health and wellbeing of older adults may vary across societies. Furthermore, researchers tend to focus mainly on income rather than other aspects of financial resources even though older adults often rely on fixed income, particularly after retirement. Using data from the Household, Income and Labour Dynamics in Australia (HILDA) survey (N=1,431), the Health and Retirement Study (HRS) in the United States of America (USA; N=4,687), and the Korean Longitudinal Study of Ageing (KLoSA; N=5,447), this exploratory cross-national study examined the relationship between wealth satisfaction and objective wealth and wellbeing (measured as self-rated health and life satisfaction) among older Australians, Americans and Koreans (50+ years). Regression analyses showed that wealth satisfaction was associated with wellbeing over and above monetary wealth in all three countries. The relationship between monetary wealth and self-rated health was larger for the US than Australian and Korean samples, while the additional contribution of wealth satisfaction to life satisfaction was larger for the Korean than the Australian and US samples. These findings are discussed in terms of the cultural and economic differences between these countries, particularly as they affect older persons.
Article: Ageing: The Common Denominator?[Show abstract] [Hide abstract]
ABSTRACT: This paper undertakes to explore the gerontological and social science literature for the purpose of highlighting that while ageing is a common phenomenon across all world societies it nevertheless remains a unique personal experience. Drawing upon the metaphorical construct of the life journey, the authors use the cultural context of ageing to illustrate how the life-path for each individual, whether long or short, is necessarily unpredictable and involves a dynamic interaction between history and biography within a particular society and cultural framework. The authors challenge prospective readers to use their sociological imagination as proffered by the renowned sociologist C.W. Mills in the interest of moving beyond the biological dimension in order to see more clearly that ‘ageing into old age’ is in essence a unique personal life story. The life story of each individual is seen to represent a compilation of ongoing levels of compliance and /or tension between the individual’s subjective world and external forces the consequence of the individual being a thinking, willing and feeling person, an existential entity with potential for meaning making, self organization and adaptive responses to changing life circumstances. Notwithstanding the diverse cultural, racial and ethnic differences between people worldwide the ageing experience is shown to be a phenomenon displaying cross-cultural variability warranting further ongoing anthropological research. An examination of the many pathways to ageing utilizing a series of interactive factors helps to explain the existence of advantages and disadvantages leading to variations in availability and access to ‘life chances’ resulting in many people experiencing unacceptable levels of ill-health, poverty, racism, ageism, inequality and widespread levels of social injustice and abuse of human rights.Journal of Population Ageing 5(4).
Cross-national insights into the relationship between wealth and
wellbeing: a comparison between Australia, the United States of
America and South Korea
SARANG KIM*, KERRY A SARGENT-COX*, DAVINA J. FRENCH*, HAL
KENDIG†, KAARIN J ANSTEY*
* Centre for Mental Health Research, The Australian National University, Canberra,
† Ageing, Work and Health Research Unit, Faculty of Health Sciences, The University
of Sydney, Sydney, NSW Australia
The positive relationship between wealth and wellbeing has received considerable
attention over the last three decades. However, little is known about how the
significance of wealth for the health and wellbeing of older adults may vary across
societies. Furthermore, researchers tend to focus mainly on income rather than other
aspects of financial resources even though older adults often rely on fixed income,
particularly after retirement. Using data from the Household, Income and Labour
Dynamics in Australia (HILDA) survey (N=1,431), the Health and Retirement Study
(HRS, N=4,687), and the Korean Longitudinal Study of Ageing (KLoSA, N=5,447),
this exploratory cross-national study examined the relationship between wealth
satisfaction and objective wealth and wellbeing (measured as self-rated health and life
satisfaction) among older Australians, Americans and Koreans (50+ years). Regression
analyses showed that wealth satisfaction was associated with wellbeing over and above
monetary wealth in all three countries. The relationship between monetary wealth and
self-rated health was larger for the United States of America (USA) than Australian and
Korean samples, while the additional contribution of wealth satisfaction to life
satisfaction was larger for the Korean than the Australian and USA samples. These
findings are discussed in terms of the cultural and economic differences between these
countries, particularly as they affect older persons.
Key words: cross-national, Australia, USA, Korea, wealth satisfaction, subjective
wellbeing, older adults, health
Wealth is strongly associated with both physical and mental health in the United States
of America (USA) and other industrialised countries (Adams et al. 2003; Diener and
Seligman 2004; Smith 1999). High-income individuals are generally healthier and live
longer (Bethencourt and Galasso 2008) and this positive relationship extends to older
adults (Kahn and Fazio 2005; Keith 1993; Kim 2006). Longitudinal studies have
demonstrated that this relationship is probably bi-directional, with wealth protecting
against illness and ill-health depleting wealth (Cai 2009; Michaud and van Soest 2008).
A similar relationship has been found in East-Asian countries such as South Korea;
individuals with a high socioeconomic status (SES) have better health states (Lee et al.
2005; Lee and Jeon 2005; Park, Jung and Lee 2009). However, these studies were
conducted at the country level and the relationship between wealth and health has not
been systematically compared between Asian and Western countries.
Individuals’ financial resources have been conceptualised in a variety of ways,
but studies have often focussed on income (Danigelis and McIntosh 2001; Hsieh 2001;
La Barbera and Gürhan 1997). For older people, sources of income are mostly fixed in
the form of social security and private pensions (Keith 1993). Elders also have different
spending patterns compared to young adults; for example, they may have fewer major
expenses such as loan repayments, whereas their health care expenses may be higher.
Measures of assets or net worth have therefore been used to quantify financial resources
for older adults and may provide additional information in this instance.
Objective measures such as income and assets might not, however, fully explain
the association between financial resources and health for older adults. The availability
of support from government and/or family in different countries is also pertinent when
making cross-national comparisons; objective measures of wealth may have different
meanings where, for example, public health services differ and wealth may play a more
or less significant role in accessing health care services. Perceptions of wealth are
contextual and subjective, but are associated with increased mortality (Szanton et al.
2008) and poorer self-rated health (Kahn and Pearlin 2006) even after controlling for
absolute income. The same level of income or net worth may be perceived as sufficient
for one person but result in financial strain for another due to different life situations or
circumstances (Kahn and Fazio 2005; Szanton et al. 2008) and this may be
independently associated with health. Inclusion of a measure of satisfaction with or
perceived adequacy of financial resources is likely to improve our understanding of the
The current study therefore investigates the relationship between wealth and
self-rated health among older Australians, Americans and South Koreans in three
nationally representative samples, using both objective and subjective measures of
In Korea adult children support their elderly parents in later life for normative and
practical reasons (Kim and Choe 1992; Yoon and Cha 1999) whereas Australian elders
are more likely to be self sufficient or recipients of government support. Differences in
subjective ratings of wealth satisfaction, and their relationship with objective wealth,
might therefore be expected between countries but research into the association between
wealth and wellbeing in Asian countries has only considered measures of objective
wealth to date.
In studies of USA samples gender has also been shown to be an important
component of the health/wealth relationship. Women in middle and old age have lower
median asset levels (Denton and Boos 2007) and less favourable pension arrangements
than men (Shuey and O’Rand 2006). This may be due to older women being less likely
to be married than men, as a result of their greater likelihood of being widowed (Keith
1993; Liang, Kahana and Doherty 1980, Mendes De Leon, Rapp and Kasl 1994). Being
without a spouse has also been found to significantly increase the wealth depleting
impact of poor health (Kim 2006). Studies that have examined gender differences from
a cross-national perspective are still lacking. A cross-national comparison allows
examination of the effect of differences in gender roles as well as work place
opportunities and policies on the relationship between health and wealth.
The current paper considers the influence of societal context on these
relationships, which to date have been explored primarily in western countries,
especially the USA and European countries. Australia and United States are important
to compare because studies examining the relationship between wealth and health have
been predominantly conducted using USA samples. These nations have similar levels
on the human development index, (HDI) which describes national wellbeing based on
average life expectancy, education levels and standard of living (United Nations
Development Programme, 2009). South Korea (hereafter Korea) is also similar to the
USA and Australia in terms of its HDI but it has very different social values and
structures to those of the USA and Australia. Since the 1960s Korea has achieved an
incredible record of growth and global integration to become a high-tech industrialized
economy (Choi 2009), and has grown more rapidly than the USA (Kim 2008).
Consequently, economic changes occurred more rapidly than societal changes and
therefore Koreans, especially older Koreans, may still hold traditional collectivist and
Confucian values in life, including traditional beliefs about gender roles. This is
reflected in the fact that, despite their similar HDI rankings, Korea is ranked 61st among
109 countries in gender empowerment compared to Australia’s 7th and the USA 18th
We expect to find a relationship between health and wealth in all three countries
and to find that satisfaction with wealth accounts for additional variance in self-rated
health beyond objective measures. Our analyses will allow us to compare the magnitude
of these effects across countries. Since gender empowerment differs markedly, the
relationships between health, wealth and satisfaction for men and women are also
expected to differ between these countries.
In contrast with health outcomes, there is a large body of research on cross-
national differences in the relationship between financial status and subjective wellbeing
(SWB), conceptualised as happiness or life satisfaction. These studies suggest that
wealth is related to SWB at the national level, with more affluent countries being on
average happier, but that this relationship is curvilinear with less effect at higher levels
of affluence (Dolan, Peasgood and White 2008). Within countries wealth and income
are more strongly associated with SWB where average incomes are low and the
availability of resources to meet basic needs is therefore more directly relevant (Diener,
Oishi and Lucas 2003). Expectations and aspirations are also important for SWB
(Dolan et al. 2008); satisfaction with wealth may reflect these and therefore be a
component of life satisfaction that is at least partially independent of objective income
Studies investigating SWB have typically employed student or national samples
with little evidence being available about the relationship between economic variables
and life satisfaction among older individuals, especially in Asia. Despite its similar HDI
ranking, per capita GDP is lower in Korea than in the USA and Australia, and there is
evidence that elders may be especially disadvantaged (Yun 2010). We therefore expect
to find a relationship between wealth satisfaction and life satisfaction that is
independent of objective income and wealth in all three countries, and that this
relationship will be somewhat larger in Korea.
Participants and Sampling
All three samples were drawn from nationally representative surveys conducted in 2006
and included only community dwelling adults. Only those aged 50 years and older were
selected for analysis to match the age range of the USA sample.
The Australian sample was drawn from the Household, Income and Labour
Dynamics in Australia (HILDA) survey, a household-based panel study, which began in
2001. The interviews have been conducted annually with household members aged 15
and over to collect information about economic and subjective wellbeing, labour market
dynamics and family dynamics. The current study analysed a total of 1,431 individuals
from wave 6 who had provided all of the required responses.
The American sample was drawn from wave 8 of the Health and Retirement
Study (HRS). HRS is a biennial, nationally representative longitudinal survey of USA
adults aged 50 and over and their spouses or partners. It covers a wide range of
measures such as physical and mental health, insurance coverage, financial status,
family support systems, labour market status, and retirement planning. The final sample
included 4,687 respondents who had completed all of the required questions.
The first wave of the Korean Longitudinal Study of Ageing (KLoSA) provided
the Korean sample. KLoSA covers the middle and old-aged population nationwide
excluding people in Jeju Island. KLoSA was designed to be comparable with similar
panel studies in other countries (e.g., the HRS in USA) that can provide the basis for
policy-making academic studies. In the first wave, a total of 10,254 respondents were
surveyed; 5,447 were within the age range and had provided sufficient data for inclusion
in this paper.
All analyses used the relevant population weights to adjust for the complex
sampling design (stratification and clustering) of each study.
For self-rated health, all three samples used the same item, asking ‘would you say your
health is…’ with a five-point Likert scale ranging from 1 (poor) to 5 (excellent). The
use of all five scale points for this dependent variable would have resulted in small cell
sizes since the distribution of self-rated health varied markedly across countries. In
order to avoid this and to obtain distributions that were as similar as possible between
countries, self-rated health was dichotomised into ‘good’ (excellent, very good and
good) and ‘poor’ (poor and fair) for logistic regression analysis.
Life satisfaction was measured with a question ‘how satisfied are you with your
life?’ on a scale of 0 to 10 for HILDA and ‘in general, how satisfied are you with your
quality of life when compared to others in your age’ on a scale of 0 to 100 for KLoSA.
For both of these measures a higher score indicates greater life satisfaction. For HRS,
life satisfaction was measured with ‘I am satisfied with my life’ with responses
measured on a six-point Likert scale from 1 (strongly disagree) to 6 (strongly agree).
The Korean variable was divided by 10 to match the eleven-point scale of the Australian
variable and the USA variable similarly transformed so that ‘strongly disagree’ was
equal to 0 and ‘strongly agree’ was equal to 10. Values in Table 1 are reported on this
Income was assessed as total household income, which has been equivalised, using the
International Experts’ Scale, i.e. income divided by the square root of household size
(Buhmann et al. 1988). Income for Australians and Koreans was further adjusted for
Purchasing Power Parity (PPP) to be comparable with the USA income. Net worth was
calculated by subtracting debts from total assets, which was also equivalised. Similar to
income, wealth for the Australian and Korean samples was adjusted for PPP. To
facilitate comparison of the odds ratios for these variables with the wealth satisfaction
variable they were entered into regression analyses as deciles.
For wealth satisfaction, HILDA asked participants how satisfied or dissatisfied
they were with their financial situation on a scale of 0 to 10, with a higher number
indicating greater satisfaction. In the U.S sample, a question ‘How satisfied are you
with (your/your family’s) present financial situation?’ was given to participants.
Responses ranged from 1 (not at all satisfied) to 5 (completely satisfied). In the Korean
sample, a similar question to HILDA was used with the exception of the scale being
between 0 (completely dissatisfied) to 100 (completely satisfied). Again the Korean
variable was divided by 10 to match the eleven-point scale of the Australian variable
and the USA variable similarly transformed so that ‘not at all satisfied’ was equal to 0
and ‘completely satisfied’ was equal to 10. Values in Table 1 are reported on this
Age groups of ten year cohorts were used as a covariate. Respondents’ marital status
was included in all surveys but different response options were provided. The
harmonised variable of partner status therefore had only two categories of currently
partnered versus not partnered. Education attainment was also collected in all three
surveys but again response categories differed. The harmonised variable had three
categories that reflected (1) primary school or less; (2) some/finished high school; and
(3) post-secondary education. The employment status variable was harmonised into five
categories indicating (1) working full time, (2) working part time, (3) completely retired,
(4) unemployed and (5) not in the labour force.
For medical conditions, in the USA and Korean samples, seven items asked
respondents whether they were ever told by a doctor that they have: diabetes; cancer
(excluding skin cancer); a lung condition (chronic bronchitis, emphysema); high blood
pressure or hypertension; a heart attack, coronary heart disease, angina, congestive heart
failure, or other heart problem; stroke; and arthritis or rheumatism. The Australian
sample on the other hand was asked whether they had any long term health condition,
impairment or disability that restricts them in their everyday activities, and has lasted or
is likely to last for 6 months or more. These included long term effects as a result of a
head injury, stroke or other brain damage; a long term condition or ailment which is still
restrictive even though it is being treated; and any other long term condition such as
arthritis, asthma, heart disease, Alzheimer’s disease, dementia, etc. Since the conditions
covered differed between countries, this information was reduced to a binary variable,
entered as 1 if the respondents’ answer for any of these items was yes and 0 if they
reported none of medical conditions.
Questions about difficulty with bathing and dressing were included in all three
surveys and were used to represent respondents’ disability level. HILDA had one item
on bathing and dressing, HRS had two items on dressing and bathing or showering, and
KLoSA had three items on dressing, washing face/hair/brushing teeth and
bathing/showering. These were harmonised across samples as 0 (no difficulty) or 1
(difficulty) with self-care.
Logistic regression was used to examine the association of income, net worth and
wealth satisfaction with self-rated health and hierarchical linear multiple regression was
used to examine their association with life satisfaction. These analyses were conducted
separately for each country, in order to show more clearly the influence of the different
national contexts, and for men and women in each country to examine the relative
importance of gender influences.
Since income and net worth shared variance they were entered together; the
overall test of model 1 indicates their combined effect. Wealth satisfaction was then
added (model 2) to assess its independent contribution. Age, partner status, education,
employment status, medical conditions, and disability were then entered for adjustment
(model 3). Since these variables are related to both health and wealth it is of interest to
examine whether the observed relationships remain when these adjustments are made,
but their disappearance would not necessarily devalue the findings since individuals do
not in fact exist independently of their life circumstances. The coefficients for these
control variables are not reported in the tables although the effect of their inclusion on
the total variance explained is provided.
Characteristics of the sample
Table 1 shows the characteristics of the Australian, USA and Korean samples. The USA
sample was older and had a lower proportion of men than Australian and Korean
samples. Koreans were significantly more likely to be partnered than Australians and
Americans; in particular more than 90 per cent of Korean men were partnered.
Educational attainment was significantly lower in the Korean sample, particularly in
Korean women. In employment status, Koreans were significantly more likely to
describe themselves as not in the labour force, and less likely to be completely retired,
than Australians and Americans.
Koreans, especially Korean women, were more likely to report their health as
poor than Americans and Australians. The largest proportion of Australians reported
their health as fair and the largest proportion of Americans reported their health as good.
Despite lower levels of self-rated health, Koreans were least likely to report having any
medical conditions or disability. The USA sample showed an extremely high proportion
of people having medical conditions and the Australian sample had the highest
proportion of people reporting disability. When transformed to equivalent scales, both
wealth satisfaction and life satisfaction were highest for Australians followed by
Americans and Koreans.
In terms of objective wealth, the USA sample had the highest mean income and
the Australian sample had the highest mean net worth, after correction for purchasing
power parity. The USA sample however had very large standard deviations for mean
income and net worth.
<Insert Table 1 about here>
Wealth and self-rated health
The odd ratios of good self-rated health can be found in Table 2. The association of
income and net worth with self-rated health (model 1) was significant in all analyses,
with 5.3-14 per cent variance explained; this effect was largest in the USA samples.
Both variables were independently associated with health for all groups except
Australian women where only net worth was significant. The addition of wealth
satisfaction (model 2) added between 0.1 per cent (USA men) and 8.4 per cent (Korean
men) variance and was significant for all groups except USA men. The odds ratios for
wealth satisfaction were considerably larger in Korea than elsewhere. After adjusting
for age, education, partner status, employment status, medical conditions, and disability,
none of the wealth variables remained significant for the Australian men. For the female
samples and the Korean men the association of wealth satisfaction with self-rated health
remained, with the sociodemographic variables explaining a further 12.3-20.9 per cent
<Insert Table 2 about here>
Wealth and satisfaction with life
A set of multiple linear regression analyses were conducted with life satisfaction as the
dependent variable, see Table 3. Income and net worth (model 1) showed a significant
association with life satisfaction in all groups except Australian men; however in the
Western samples this effect explained less than 5 per cent variance. The effect was
somewhat larger in the Korean groups, with 12-13 per cent variance explained. Wealth
satisfaction (model 2) shared an independent 8.4-29.3 per cent variance with life
satisfaction and showed similar relationships for men and women; regression
coefficients exceeded 0.3 in the Western countries and 0.5 in Korea. After adjusting for
age, education, partner status, employment status, medical conditions, and disability
these coefficients changed only slightly.
<Insert Table 3 about here>
In this cross-national study, we explored associations between different measures of
wealth and wellbeing in older adults in Australia, the USA and South Korea. The
findings suggest that older individuals’ satisfaction with their wealth is associated with
wellbeing over and above the objective level of their income and assets. This pattern
was found across all three countries for life satisfaction and in four of the six analyses
for self-rated health. Although the following discussion highlights the differences that
were observed between analyses, it should be noted that wealth satisfaction was
commonly associated with wellbeing over and above the effect of objective wealth in
the samples that we investigated. This supports previous findings that objective income
measures alone are not adequate indicators of socioeconomic status in older adults (Sun
et al. 2009) and that the relationship between wealth satisfaction and wellbeing is
distinct from objective economic status (Myers 2000).
The association between monetary wealth and self-rated health was largest for
the American samples, and the additional effect of wealth satisfaction was smaller for
Americans than in the other countries. This could be due to differences in health
insurance cover in these countries. In the USA, the health care system relies heavily on
the private insurance sector. Private health insurers cover about 35 per cent of national
health spending in the USA and out of pocket payment by patients is about 19 per cent
(Reinhardt 2001). The remainder is covered by government programmes, including the
federal Medicare programme for persons aged 65 and over. Although Medicare helps to
cover in-patient care and out-patient services, about 12 million elderly Americans do
not have cover for expenses such as prescription drugs, which are excluded from
Medicare (Reinhardt 2001). In addition it should be noted that our sample was selected
from those aged 50 years and over, thereby including a proportion of people not eligible
for Medicare. Therefore, real financial resources may be more closely associated with
good health in the USA sample than in Australia and Korea because they confer the
opportunity for adequate health insurance and direct purchase of improved health care.
In Korea the association of wealth satisfaction with self-rated health, after taking
account of objective wealth, was large and similar for men and women. In the two
Western countries however, wealth satisfaction showed this unique association with
self-rated health only among women; the effect was not significant for USA men and in
Australian men it was lost after adjustment for age, education, partner status,
employment status, medical conditions and disability.