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Abstract In early March 2020, two crises emerged: the COVID-19 public health crisis and a corresponding economic crisis resulting from business closures and skyrocketing job losses. While the link between socioeconomic status and infectious disease is well-documented, the psychological relationships among economic considerations, such as financial constraint and economic anxiety, and health considerations, such as perceptions of disease spread and preventative actions, is not well understood. Despite past research illustrating the strong link between financial fragility and a wide range of behaviors, surprisingly little research has examined the psychological relationship between the economic crisis and beliefs and behaviors related to the co-occurring health crisis. We show that financial constraint predicts people’s beliefs about both their personal risk of infection and the national spread of the virus as well as their social distancing behavior. In addition, we compare the predictive utility of financial constraint to two other commonly studied factors: political partisanship and local disease severity. We also show that negative affect partially mediates the relationship between financial constraint and COVID-19 beliefs and social distancing behaviors. These results suggest the economic crisis created by COVID-19 spilled over into people’s beliefs about the health crisis and their behaviors.
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Global Life Insurers during a Low Interest Rate Environment
Life insurers' business model has changed with the growth of insurance products with minimum return guarantees that are exposed to market and interest risks. The interest risk exposure of US and European insurers increased in the low-rate environments after the global financial crisis and the European sovereign debt crisis, respectively. The relative fragility of life insurers is highly persistent across the global financial crisis, the European sovereign debt crisis, and the COVID-19 crisis. European insurers with a higher share of liabilities with minimum return guarantees in 2016 had lower stock returns during the COVID-19 crisis.
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- Award ID(s):
- 1727049
- PAR ID:
- 10335074
- Date Published:
- Journal Name:
- AEA Papers and Proceedings
- Volume:
- 112
- ISSN:
- 2574-0768
- Page Range / eLocation ID:
- 503 to 508
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
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Accepted Manuscript1.0
- Journal Article:
- https://doi.org/10.1257/pandp.20221076
