Household Debt and Adult Depressive Symptoms

Abstract

This study uses data from waves 1 (1987-1989) and 2 (1992-1994) of the National Survey of Families and Households in the United States and a series of standard ordinary least squares (OLS) regressions and OLS regressions with individual-specific fixed effects to estimate associations of particular types and levels of debt with adult depressive symptoms. Results suggest that household debt is positively associated with greater depressive symptoms. However, this association is driven by short-term (unsecured) debt; we find little evidence of associations with depressive symptoms for mid- or long-term debt. The link between short-term debt and depression is generally robust to alternative specifications of our models, including whether debt is defined in absolute or relative terms. Furthermore, these associations are particularly concentrated among 51 to 64 year old adults and those with a high school education or less. These findings suggest that short-term debt may have an adverse influence on psychological wellbeing, particularly for those who are less educated or are approaching retirement age.

Keywords: CES-D, consumer debt, debt, depression, household debt, National Survey of Families and Households, psychological well-being

JEL Classification: C81, D14, I31