Financial Strain, Mental Illness, and Homelessness: Results From a National Longitudinal Study

Research indicates that adults with severe mental illness have lower income and employment than adults without severe mental illness. Further, mental illness has been identified as a risk factor for homelessness. However, little research has investigated the interrelationships between financial strain, mental illness, and homelessness. It is unknown whether or to what extent financial strain mediates the association between mental illness and subsequent homelessness.

This study examined financial strain and severe mental illness (psychotic, bipolar, and depressive disorders in the past 12 months) as predictors of subsequent homelessness and financial strain as a mediator of the link between severe mental illness and homelessness by analyzing data from waves 1 and 2 of the National Epidemiologic Survey on Alcohol and Related Conditions (n=34,653).

χ2 and multivariable analyses revealed that financial crises and debt, lower income, unemployment, and past homelessness at wave 1 each significantly predicted subsequent homelessness between waves 1 and 2. For participants with and without severe mental illness, risk of homelessness between waves 1 and 2 increased as a function of the number of financial strain variables at wave 1. Mediation analyses showed a direct effect of severe mental illness on future homelessness as well as an indirect effect via greater financial strain, which accounted for 39% of the link between mental illness and homelessness.

The findings showing that financial strain mediated the association between severe mental illness and homelessness support assessment of financial well-being in the context of treatment of mental illness and homeless service programs. The results suggest that individuals experiencing homelessness who have severe mental illness may benefit from assistance increasing financial literacy, improving money management, and achieving financial well-being.