Broke, Ill, and Obese: The Effect of Household Debt on Health
We analyze the effect of household indebtedness on different health outcomes using data from the German Socio-Economic Panel from 1999-2009. To establish a causal effect, we rely on (a) fixed-effects methods, (b) a subsample of constantly employed individuals, and (c) lagged debt variables to rule out 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. Controlling for unobserved heterogeneity and reversed causality we find evidence that household debt also causally deteriorates physical and mental health. However, there is no causal effect on being obese.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: Mohrenstraße 58, D-10117 Berlin|
Web page: http://www.diw.de/en/soep
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ada Ferrer-i-Carbonell & Paul Frijters, 2004.
"How Important is Methodology for the estimates of the determinants of Happiness?,"
Royal Economic Society, vol. 114(497), pages 641-659, 07.
- Ada Ferrer-i-Carbonell & Paul Frijters, 2002. "How important is Methodology for the Estimates of the Determinants of Happiness?," Tinbergen Institute Discussion Papers 02-024/3, Tinbergen Institute.
- Marcus Eliason & Donald Storrie, 2009.
"Does Job Loss Shorten Life?,"
Journal of Human Resources,
University of Wisconsin Press, vol. 44(2).
- Martin Browning & Anne Moller Dano & Eskil Heinesen, 2006. "Job displacement and stress-related health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1061-1075.
- Burcu Duygan-Bump & Charles Grant, 2009. "Household debt repayment behaviour: what role do institutions play?," Economic Policy, CEPR;CES;MSH, vol. 24, pages 107-140, 01.
- David Cutler & Angus Deaton & Adriana Lleras-Muney, 2006.
"The Determinants of Mortality,"
Journal of Economic Perspectives,
American Economic Association, vol. 20(3), pages 97-120, Summer.
- David Cutler & Angus Deaton & Adriana Lleras-Muney, 2005. "The Determinants of Mortality," Working Papers 164, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
- Cutler, David & Lleras-Muney, Adriana & Deaton, Angus, 2006. "The Determinants of Mortality," Scholarly Articles 2640588, Harvard University Department of Economics.
- David Cutler & Angus Deaton & Adriana Lleras-Muney, 2005. "The Determinants of Mortality," Working Papers 235, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
- David M. Cutler & Angus S. Deaton & Adriana Lleras-Muney, 2006. "The Determinants of Mortality," Working Papers id:359, eSocialSciences.
- David M. Cutler & Angus S. Deaton & Adriana Lleras-Muney, 2006. "The Determinants of Mortality," NBER Working Papers 11963, National Bureau of Economic Research, Inc.
- Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007.
"The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements,"
Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften,
Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
- Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Brown, Sarah & Taylor, Karl & Wheatley Price, Stephen, 2005. "Debt and distress: Evaluating the psychological cost of credit," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 642-663, October.
- Salm, M., 2009. "Does job loss cause ill health?," Other publications TiSEM 314436db-9957-4912-ba47-9, Tilburg University, School of Economics and Management.
- Andreas Kuhn & Rafael Lalive & Josef Zweimï¿½ller, 2009.
"The public health costs of job loss,"
IEW - Working Papers
424, Institute for Empirical Research in Economics - University of Zurich.
- Kuhn, Andreas & Lalive, Rafael & Zweimüller, Josef, 2009. "The Public Health Costs of Job Loss," CEPR Discussion Papers 7420, C.E.P.R. Discussion Papers.
- Andreas Kuhn & Rafael Lalive & Josef Zweimüller, 2009. "The Public Health Costs of Job Loss," NRN working papers 2009-13, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
- Kuhn, Andreas & Lalive, Rafael & Zweimüller, Josef, 2009. "The Public Health Costs of Job Loss," IZA Discussion Papers 4355, Institute for the Study of Labor (IZA).
- Richard Disney & Sarah Bridges, .
"Debt and depression,"
06/02, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
- Peter Adams & Michael D. Hurd & Daniel L. McFadden & Angela Merrill & Tiago Ribeiro, 2004.
"Healthy, Wealthy, and Wise? Tests for Direct Causal Paths between Health and Socioeconomic Status,"
in: Perspectives on the Economics of Aging, pages 415-526
National Bureau of Economic Research, Inc.
- Adams, Peter & Hurd, Michael D. & McFadden, Daniel & Merrill, Angela & Ribeiro, Tiago, 2003. "Healthy, wealthy, and wise? Tests for direct causal paths between health and socioeconomic status," Journal of Econometrics, Elsevier, vol. 112(1), pages 3-56, January.
- David B. Gross & Nicholas S. Souleles, 2002. "Do Liquidity Constraints and Interest Rates Matter for Consumer Behavior? Evidence from Credit Card Data," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 149-185.
- Matthias Nübling & Hanfried H. Andersen & Axel Mühlbacher & Jürgen Schupp & Gert G. Wagner, 2007. "Computation of Standard Values for Physical and Mental Health Scale Scores Using the SOEP Version of SF12v2," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 171-182.
- Salm, Martin, 2009.
"Does Job Loss Cause Ill Health?,"
IZA Discussion Papers
4147, Institute for the Study of Labor (IZA).
- Marmot, Michael & Ryff, Carol D. & Bumpass, Larry L. & Shipley, Martin & Marks, Nadine F., 1997. "Social inequalities in health: Next questions and converging evidence," Social Science & Medicine, Elsevier, vol. 44(6), pages 901-910, March.
- Pamela Lenton & Paul Mosley, 2008. "Debt and Health," Working Papers 2008004, The University of Sheffield, Department of Economics, revised Apr 2008.
- Daniel Sullivan & Till von Wachter, 2009. "Job Displacement and Mortality: An Analysis Using Administrative Data," The Quarterly Journal of Economics, Oxford University Press, vol. 124(3), pages 1265-1306.
- Drentea, Patricia & Lavrakas, Paul J., 2000. "Over the limit: the association among health, race and debt," Social Science & Medicine, Elsevier, vol. 50(4), pages 517-529, February.
- Regina T. Riphahn, 1999.
"Income and employment effects of health shocks A test case for the German welfare state,"
Journal of Population Economics,
Springer;European Society for Population Economics, vol. 12(3), pages 363-389.
- Riphahn, Regina T., 1998. "Income and Employment Effects of Health Shocks - A Test Case for the German Welfare State," IZA Discussion Papers 10, Institute for the Study of Labor (IZA).
When requesting a correction, please mention this item's handle: RePEc:diw:diwsop:diw_sp350. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek)
If references are entirely missing, you can add them using this form.