Note: Financial support by the RGS Econ and the Leibniz Association is gratefully acknowledged. We thank two anonymous referees for very helpful suggestions to improve the paper. We are grateful for comments during presentations at the DGGOE Conference (Berlin), SMYE (Luxembourg), ESPE (Essen), IRDES Workshop (Paris), SOEP User Conference (Berlin), Health.Happiness.Inequality (Darmstadt) and the RGS Workshop (Duisburg-Essen).
Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?
Article first published online: 7 DEC 2012
© 2012 International Association for Research in Income and Wealth
Review of Income and Wealth
Volume 60, Issue 3, pages 525–541, September 2014
How to Cite
Keese, M. and Schmitz, H. (2014), Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?. Review of Income and Wealth, 60: 525–541. doi: 10.1111/roiw.12002
- Issue published online: 25 JUL 2014
- Article first published online: 7 DEC 2012
- RGS Econ and the Leibniz Association
- health satisfaction;
- mental health;
We analyze the association between household indebtedness and different health outcomes using data from the German Socio-Economic Panel 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.