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Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?
Author(s) -
Keese Matthias,
Schmitz Hendrik
Publication year - 2014
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12002
Subject(s) - debt , household debt , economics , causality (physics) , demographic economics , obesity , loan , mental health , household income , monetary economics , medicine , macroeconomics , geography , endocrinology , physics , archaeology , psychiatry , quantum mechanics
We analyze the association between household indebtedness and different health outcomes using data from the G erman S ocio‐ E conomic P anel from 1999 to 2009. We control for unobserved heterogeneity by applying fixed‐effects methods and furthermore use a subsample of constantly employed individuals plus lagged debt variables to reduce 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. This relationship vanishes for obesity after controlling for unobserved heterogeneity while it stays significant with respect to worse physical and mental health.