Responses to Financial Loss During the Great Recession: An Examination of Sense of Control in Late Midlife

Abstract

Objectives: The "Great Recession" shocked the primary institutions that help individuals and families meet their needs and plan for the future. This study examines middle-aged adults' experiences of financial loss and considers how socioeconomic and interpersonal resources facilitate or hinder maintaining a sense of control in the face of economic uncertainty.

Method: Using the 2006 and 2010 waves of the Health and Retirement Study, change in income and wealth, giving help to and receiving help from others, household complexity, and sense of control were measured among middle-aged adults (n = 3,850; age = 51-60 years).

Results: Socioeconomic resources predicted both the level of and change in the engagement of interpersonal resources prior to and during the Great Recession. Experiences of financial loss were associated with increased engagement of interpersonal resources and decreased sense of control. The effect of financial loss was dampened by education. Sense of control increased with giving help and decreased with household complexity.

Discussion: Findings suggest that, across socioeconomic strata, proportional loss in financial resources resulted in a loss in sense of control. However, responses to financial loss differed by socioeconomic status, which differentiated the ability to maintain a sense of control following financial loss.

Keywords: Agency; Financial loss; Great recession; Household complexity; Intergenerational transfers; Interpersonal resources; Sense of control; Structure.