# The association between financial strain, psychological distress and subsequent depression: findings from a Norwegian national study

## TL;DR

This study finds that financial strain among Norwegian students is linked to a higher risk of depression one year later, but much of this link is due to existing psychological distress.

## Contribution

The study provides new longitudinal evidence on how financial strain predicts depression in students, using nationally representative diagnostic data.

## Key findings

- Students with frequent financial difficulties had a 3.55-fold increased risk of major depressive episode (MDE) one year later.
- Adjusting for psychological distress reduced the association between financial strain and MDE significantly.
- Over one-third of students spent 60% or more of their income on housing, highlighting widespread financial strain.

## Abstract

Financial strain is increasingly recognised as a contributor to psychological distress, which may in turn elevate the risk of developing mental disorder. However, few large-scale longitudinal studies have investigated its predictive role using diagnostic outcomes among higher education students.

To examine whether financial strain predicts a major depressive episode (MDE) one year later among Norwegian students, and whether associations are explained by sociodemographic factors or baseline psychological distress.

Data were drawn from the national Students’ Health and Wellbeing Study 2022 (SHoT2022) survey (N = 53 362), with a diagnostic follow-up one year later (N = 10 460) using the self-administered Composite International Diagnostic Interview version 5.0 (CIDI 5.0). Inverse probability weighted Poisson regression with robust standard errors estimated the risk of 30-day DSM-5-defined MDE for each financial indicator.

Financial strain was widespread: 6% reported frequent financial difficulties, 27% were unable to cover an emergency expense of 5000 Norwegian kroner (NOK; approximately €450/$500, and 35% spent 60% or more of their income on housing. Several indicators significantly predicted later MDE. Students frequently experiencing financial difficulties had a 3.55-fold increased risk (95% CI:2.97–4.22), attenuating to 1.53 (1.28–1.83) after full adjustment. Similar patterns emerged for most indicators. Associations were largely unaffected by sociodemographic adjustment, but were substantially reduced after accounting for baseline psychological distress.

Financial strain was associated with increased risk of MDE one year later, although much of the association was explained by baseline distress. Policies should address both financial and psychological vulnerabilities through strengthened financial support, alignment with living costs and targeted measures such as financial counselling and housing assistance.