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Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?

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  • Matthias Keese
  • Hendrik Schmitz

Abstract

type="main"> We analyze the association between household indebtedness and different health outcomes using data from the German Socio-Economic Panel from 1999 to 2009. We control for unobserved heterogeneity by applying fixed-effects methods and furthermore use a subsample of constantly employed individuals plus lagged debt variables to reduce problems of reverse causality. We apply different measures of household indebtedness, such as the percentage shares of household income spent on consumer credit and home loan repayments (which indicate the severity of household indebtedness) and a binary variable of relative overindebtedness (which indicates a precarious debt situation). We find all debt measures to be strongly correlated with health satisfaction, mental health, and obesity. This relationship vanishes for obesity after controlling for unobserved heterogeneity while it stays significant with respect to worse physical and mental health.

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  • Matthias Keese & Hendrik Schmitz, 2014. "Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(3), pages 525-541, September.
  • Handle: RePEc:bla:revinw:v:60:y:2014:i:3:p:525-541
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    File URL: http://hdl.handle.net/10.1111/roiw.12002
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    1. repec:spr:demogr:v:56:y:2019:i:4:d:10.1007_s13524-019-00800-7 is not listed on IDEAS
    2. Carrino, Ludovico & Glaser, Karen & Avendano, Mauricio, 2018. "Later Pension, Poorer Health? Evidence from the New State Pension Age in the UK," MPRA Paper 87575, University Library of Munich, Germany.
    3. Blázquez Cuesta, Maite & Budría, Santiago & Moro-Egido, Ana I., 2019. "Job Insecurity, Debt Burdens and Individual Health," IZA Discussion Papers 12663, Institute of Labor Economics (IZA).
    4. Kiranmoy Das & Bhuvanesh Pareek & Sarah Brown & Pulak Ghosh, 2017. "A Semiparametric Bayesian Approach to a New Dynamic Zero-Inflated Model," Working Papers 2017001, The University of Sheffield, Department of Economics.
    5. Alzuabi, Raslan & Brown, Sarah & Gray, Daniel & Harris, Mark N. & Spencer, Christopher, 2019. "Household Saving, Health, and Healthcare Utilisation in Japan," CEI Working Paper Series 2018-17, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    6. repec:hpe:journl:y:2018:v:227:i:4:p:103-131 is not listed on IDEAS
    7. Maite Blázquez & Santiago Budría, 2018. "The Effects of Over-indebtedness on Individual Health," Hacienda Pública Española, IEF, vol. 227(4), pages 103-131, December.
    8. Declan French, 2016. "Financial Strain in the United Kingdom," CHaRMS Working Papers 16-02, Centre for HeAlth Research at the Management School (CHaRMS).
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    10. Stefan Angel, 2016. "The Effect of Over-Indebtedness on Health: Comparative Analyses for Europe," Kyklos, Wiley Blackwell, vol. 69(2), pages 208-227, May.
    11. Hojman, Daniel A. & Miranda, Álvaro & Ruiz-Tagle, Jaime, 2016. "Debt trajectories and mental health," Social Science & Medicine, Elsevier, vol. 167(C), pages 54-62.
    12. Clayton, Maya & Liñares-Zegarra, José & Wilson, John O.S., 2015. "Does debt affect health? Cross country evidence on the debt-health nexus," Social Science & Medicine, Elsevier, vol. 130(C), pages 51-58.

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