Medical care, living conditions, and children's well-being

We examine the effect of medical care and living conditions on children's physical and psychological well-being. We develop a causal model in which living conditions (including the socioeconomic status of the family and the social-psychological aspects of family functioning) may affect well-being both directly, and indirectly through medical care. We find that families in the higher social classes and families that function well tend to go to large prepaid groups where they receive good medical care. High quality technical care of illness, in turn, improves physical health. The quality of psychotherapeutic care, on the other hand, has no effect on psychological well-being. For this aspect of health, the effect of living conditions is largely direct, rather than indirect by way of medical care. Families characterized by high levels of functioning have children who are psychologically healthy. In addition, physical health affects psychological well-being, but not vice versa.