Mentally Spent: Credit Conditions and Mental Health

42 Pages Posted: 26 Feb 2019

See all articles by Qing Hu

Qing Hu

The University of Hong Kong - Faculty of Business and Economics

Ross Levine

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Chen Lin

The University of Hong Kong - Faculty of Business and Economics

Mingzhu Tai

The University of Hong Kong - School of Economics and Finance

Date Written: February 2019

Abstract

In light of the human suffering and economic costs associated with mental illness, we provide the first assessment of whether local credit conditions shape the incidence of mental depression. Using several empirical strategies, we discover that bank regulatory reforms that improved local credit conditions reduced mental depression among low-income households and the impact was largest in counties dominated by bank-dependent firms. On the mechanisms, we find that the regulatory reforms boosted employment, income, and mental health among low-income individuals in bank-dependent counties, but the regulatory reforms did not increase borrowing by these individuals.

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Suggested Citation

Hu, Qing and Levine, Ross Eric and Lin, Chen and Tai, Mingzhu, Mentally Spent: Credit Conditions and Mental Health (February 2019). NBER Working Paper No. w25584. Available at SSRN: https://ssrn.com/abstract=3341244

Qing Hu (Contact Author)

The University of Hong Kong - Faculty of Business and Economics ( email )

Hong Kong

Ross Eric Levine

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Chen Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Mingzhu Tai

The University of Hong Kong - School of Economics and Finance ( email )

8th Floor Kennedy Town Centre
23 Belcher's Street
Kennedy Town
Hong Kong

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