This Is Your Brain on Financial Troubles

New research reveals the relationship between income drops and brain health.

Posted Nov 05, 2019

 John Hain. Pixabay, CC0.
Source: Image credit: John Hain. Pixabay, CC0.

Income and Health

“What does money mean to you?” If someone took a survey of Americans on this question, you might expect answers like these:

  • “Security.”
  •  “Status.”
  • “Peace of mind.”
  • “I could pay off my debts.”
  • “Dream vacations."
  •  “Buying anything I want.”
  • “Power.”

Probably very few people would reply that money means “a healthier brain.”  Yet a recent paper published in the online journal Neurology shows a strong correlation between drops in income in young adulthood and brain health in middle age. (Just to clarify, in this blog “brain health” refers to changes in the functioning and structure of the brain itself, as opposed to “mental health” which refers to well-being or distress in the mind.)

In a fascinating 2019 study by Dr. Leslie Grasset and associates, summarized here, 3287 young people between the ages of 23 and 35 were asked to report their annual pre-tax income every three to five years for 20 years, from 1990 to 2010. (These self-reports were one limitation of this study, as they could not be verified.) Then the researchers looked at drops in income and percentage change in income for participants. 

Using this data, researchers divided participants into three groups:

      Group 1: 1780 people who did not have an income drop.

      Group 2: 1108 people who had one drop of 25% or more

      Group 3: 399 people who had two or more drops of 25% or more

Participants were then given three different memory and thinking tests, all well-known tests related to cognitive functioning. Results and time taken to complete tasks were both noted. 

The results? Those with income drops scored lower in task completion and also took more time to complete tasks on one test, with each income drop associated with a lower score. On another test, having two or more income drops was associated with reduced executive functioning. Researchers got the same results after adjusting for high blood pressure, education level, physical activity and smoking, all factors which could have affected thinking skills. (On tests of verbal memory, there was no difference between the groups.) 

In a direct measure of brain health, 707 of the above participants had MRIs at the beginning of the study and 20 years later.  People with two or more income drops had smaller brain volume and reduced brain connectivity than those with no income drops. 

Could poor cognitive skills have caused the drops in income instead of the other way around? To rule out the possibility that “reverse causation” was at the root of their findings, the researchers re-crunched the data using only participants with high education levels.  The results were similar.  The researchers also state that, “In line with our results, …the longer one experiences financial difficulties, the worse it is for the brain.” 

Interpreting the Results

Why would income volatility affect brain health?

The researchers mention and explore a variety of possible reasons:

  1.  People with a lower or unstable income might have limited access to health care providers, resulting in poor management of chronic diseases (like diabetes), as well as an inability to pay for mental health providers.
  2. The socioeconomic disadvantage has been associated with unhealthy habits that could lead to poor cognitive functioning, such as low physical activity, smoking, and overuse of alcohol. In this study, however, these health behaviors contributed only slightly to the results.
  3. Episodes of income volatility could increase depression, obesity, and hypertension which are associated with both poor cognitive health as well as physical health.  For example, research published earlier in 2019 found a correlation between income fluctuation and heart disease risk.  
  4.  Income volatility exposes people to a variety of stressors which, in turn, can affect cognitive function and dementia risk, among other dire possibilities. 

In other research on the effects of income volatility, fluctuating income has even been linked to specific drops in IQ. In their book, Scarcity: Why Having Too Little Means So Much, researchers Sendhil Mulleinathan and Eldar Shafir studied Indian sugar cane farmers.  They took various measures of individuals' IQ both before harvest, when money was tight, and after harvest, when money was plentiful.  Pre-harvest IQ was lower by about 9-10 points; post-harvest IQ rebounded to its usual level.  I mention this research because it offers some hope that changes in circumstance or other interventions might reverse drops in cognitive functioning. 

Possible Policy and Self-Help Solutions

Dr. Leslie Grasset, the study's first author, suggests that policies that enhance income stability could be helpful in protecting the brain health of young income-earners in their peak earning years.  Programs that could stabilize income might include better unemployment insurance, expansion of the Earned Income Tax Credit, nutritional assistance (such as that provided by SNAP, the Supplemental Nutritional Assistance Program), and other short-term income supports. I would add that since medical bills are the number one cause of bankruptcy in the US, universal access to healthcare would go a long way toward creating the peace of mind that might protect brain health, as I point out here.  Secure pensions might also be a significant help.

Unfortunately, according to Grasset, "Income volatility is at a record level since the 1980s and there is growing evidence that it may have pervasive effects on health, yet policies intending to smooth unpredictable income changes are being weakened in the United States and many other countries."

Of course, individuals can help themselves with behavior changes such as saving more, spending less, and avoiding debt. They can also use self-care techniques such as exercise and meditation to counter the mental health stress of income drops.  Unfortunately, one result of financial insecurity is poor decision-making, as described more fully here, so policy solutions are of utmost importance.

In a Nutshell

The study findings are important for a number of reasons.  The results indicate that income volatility begins affecting the brains of young people as early as middle age, not just at older ages.  And, as the researchers write, “With people now living longer, healthy aging and the maintenance of cognitive abilities have become more important than ever.”

It’s heart-breaking that people who undergo the stress of income fluctuations also experience additional suffering in the body, mind, and brain. Healthspan, life span, IQ, willpower--all these seem to be affected. 

There’s an old saying, “Health is wealth,” reflecting the wisdom that when you’ve got your health, you’ve got just about everything, as an old ad used to say. But this piece of research, along with others, suggests that the opposite is unfortunately also true: "Wealth is health.”

© Meg Selig, 2019.  For permissions, click here.                                              


Grasset, L., et al. “Relation between 20-year income volatility and brain health in midlife.” NeurologyR (Online journal of the American Academy of Neurology), Oct. 2, 2019.  DOI: 10.1212/WNL.0000000000008463

For a summary of the above, see:  “Drops in income not only hurt the wallet, but also harm the brain.” ScienceDaily, Oct. 2, 2019.   

"Fluctuating personal income may be associated with an increased heart disease risk," ScienceDaily, Jan. 7. 2019. 

Selig, M. "This common problem can destroy your willpower,"

Konish, L. "This is the reason most Americans file for bankruptcy.", Feb. 11, 2019.