Killer Debt: The Impact of Debt on Mortality

25 Pages Posted: 2 Dec 2016

See all articles by Laura M. Argys

Laura M. Argys

University of Colorado at Denver - Department of Economics

Andrew Friedson

University of Colorado at Denver - Department of Economics

M. Melinda Pitts

Federal Reserve Bank of Atlanta

Date Written: 2016-11-01

Abstract

This study analyzes the effect of individual finances (specifically creditworthiness and severely delinquent debt) on mortality risk. A large (approximately 170,000 individuals) subsample of a quarterly panel data set of individual credit reports is utilized in an instrumental variables design. The possibility of the reverse causality of bad health causing debt and death is removed by instrumenting for individual finances post 2011 using the exposure to the housing crisis based on their 2005 residence. Worsening creditworthiness and increases in severely delinquent debt are found to lead to increases in individual mortality risk. This result has implications for the benefit of policies such as the social safety net, which aims to protect individual finances, by adding reduced mortality to the benefit of any intervention.

Keywords: debt, mortality, creditworthiness

JEL Classification: D14, I1

Suggested Citation

Argys, Laura M. and Friedson, Andrew and Pitts, M. Melinda, Killer Debt: The Impact of Debt on Mortality (2016-11-01). FRB Atlanta Working Paper No. 2016-14. Available at SSRN: https://ssrn.com/abstract=2879277

Laura M. Argys (Contact Author)

University of Colorado at Denver - Department of Economics ( email )

Campus Box 181
P.O. Box 173364
Denver, CO 80217-3364
United States
303-556-3547 (Fax)

Andrew Friedson

University of Colorado at Denver - Department of Economics ( email )

Campus Box 181
P.O. Box 173364
Denver, CO 80217-3364
United States

M. Melinda Pitts

Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street, NE
Atlanta, GA 30309-4470
United States
404-498-7009 (Phone)
404-498-8956 (Fax)

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