Journal
SOCIAL SCIENCE & MEDICINE
Volume 167, Issue -, Pages 54-62Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.socscimed.2016.08.027
Keywords
Debt; Over-indebtedness; Credit; Depression
Funding
- FONDECYT project [1121016]
- Centre for Social Conflict and Cohesion Studies [CONICYT/FONDAP/15130009]
- Iniciativa Cientifica Milenio [NS100041]
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In the last few decades, there was a marked increase in consumer debt in the United States, Latin America and other emerging countries, spurring a debate about the real costs and benefits of household credit. Using a unique longitudinal dataset with detailed health and balance sheet information from a large sample of 10,900 Chilean households we study the relationship between debt trajectories in a three-year time window and mental health. We find that depressive symptoms are higher for those who have been persistently over-indebted, followed by those who transit from moderate to high debt levels. We also find that those who transition from over-indebtedness to moderate debt levels have no additional depressive symptoms compared to those with trajectories of moderate debt throughout (never over indebted). This suggests that the debt-related contribution to depressive symptoms vanishes as debt levels fall. The association between debt and depressive symptoms seems to be driven by non-mortgage debt-primarily consumer credit- or late mortgage payments; secured debt (secured by collateral) per se is not associated with depressive symptoms. Policy interventions to reduce the negative association of over-indebtedness on mental health are discussed. (C) 2016 Elsevier Ltd. All rights reserved.
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