Are your credit cards killing you?

Debt hurts your 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.

Source: Keese, Matthias and Schmitz, Hendrik, Broke, Ill, and Obese: The Effect of Household Debt on Health (January 5, 2011). Ruhr Economic Paper No. 234. 

Join over 151,000 readers. Get a free weekly update via email here.

Related posts:

How To Stop Being Lazy And Get More Done – 5 Expert Tips

6 Things The Most Productive People Do Every Day

New Harvard Research Reveals A Fun Way To Be More Successful

Post Details