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Job loss is a common and disruptive life event. It is known to have numerous long-term negative effects on financial, health, and social outcomes. While the negative effects of becoming unemployed on health and well-being are well understood, the influence of job loss on financial decisions has received little attention. Across a large-scale survey ( $N=37,854$), spending data from a bank ( $N=404,470$), and two online experiments (total $N=1,403$), we find that job loss increases financial risk-taking. First, in survey data, job loss is associated with elevated levels of self-reported financial risk-taking and lottery ticket purchases. Next, using administrative data from a large bank, we find consistent causal evidence of the influence of job loss on gambling spending. Although total spending decreases after job loss, gambling spending is less affected than our control categories. Finally, we turn to two incentive-compatible manipulations of job loss operationalized in a lab setting. We find that this experimental manipulation increases the take-up of financial risks. The current finding that job loss increases financial risk-taking could accentuate long-term negative financial effects of job loss. 

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. 

Development of an effective COVID-19 vaccine is widely considered as one of the best paths to ending the current health crisis. While the ability to distribute a vaccine in the short-term remains uncertain, the availability of a vaccine alone will not be sufficient to stop disease spread. Instead, policy makers will need to overcome the additional hurdle of rapid widespread adoption. In a large-scale nationally representative survey ( N = 34,200), the current work identifies monetary risk preferences as a correlate of take-up of an anticipated COVID-19 vaccine. A complementary experiment ( N = 1,003) leverages this insight to create effective messaging encouraging vaccine take-up. Individual differences in risk preferences moderate responses to messaging that provides benchmarks for vaccine efficacy (by comparing it to the flu vaccine), while messaging that describes pro-social benefits of vaccination (specifically herd immunity) speeds vaccine take-up irrespective of risk preferences. Findings suggest that policy makers should consider risk preferences when targeting vaccine-related communications.