Poor Physical and Financial Health Driven by Fatalism

Savings and health improvement behaviors highly correlated, study finds

By Stephen Miller, CEBS Jul 10, 2014

The same underlying psychological factors are behind poor physical and financial health, a new study from Olin Business School at Washington University in St. Louis finds.

The researchers found that the decision to contribute to a 401(k) retirement plan predicted whether or not an individual will act to correct poor physical health indicators revealed during an employer-sponsored health examination. Even after controlling for differences in initial health, demographics and job type, the researchers found that those who had previously chosen to save for the future through 401(k) contributions improved their health significantly more than noncontributors, despite having few health differences prior to program implementation.

“We find that existing retirement contribution patterns and future health improvements are highly correlated,” says the study report by Lamar Pierce, associate professor of strategy at Olin, and doctoral candidate Timothy Gubler. “Those who save for the future by contributing to a 401(k) improved abnormal health test results and poor health behaviors approximately 27 percent more than noncontributors.”

The report, “Healthy, Wealthy, and Wise: Retirement Planning Predicts Employee Health Improvements,” was published June 30, 2014, in the journal Psychological Science.

The researchers studied personnel and health data from eight industrial laundry locations in multiple states. They found the previous decision of an employee to forgo immediate income and contribute to a 401(k) retirement plan predicted whether he or she would respond proactively to the revelation of poor physical health.

While the decision not to defer income could by itself indicate a worker living paycheck to paycheck and thus unable to spare any income for savings, the failure to improve behaviors putting the employee’s health at risk, once pointed out, indicates a lack of trust that actions taken today can result in better futures down the road. Confronting that fatalism may be necessary before these employees will take constructive steps to adopt healthier habits and to save for their future, to the extent they can afford to do so, the research suggests.

Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.

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