Review of Income and Wealth

Volume 60, Issue 3 p. 525-541

Original Article

Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?

Matthias Keese,

Matthias Keese

Ruhr Graduate School in Economics and University Duisburg–Essen

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Hendrik Schmitz,

Corresponding Author

Hendrik Schmitz

University Duisburg–Essen and RWI

Correspondence to Hendrik Schmitz, University Duisburg–Essen, Fachbereich Wirtschaftswissenschaften, Schützenbahn 70, 45117 Essen, Germany ([email protected]).Search for more papers by this author

Matthias Keese,

Matthias Keese

Ruhr Graduate School in Economics and University Duisburg–Essen

Search for more papers by this author

Hendrik Schmitz,

Corresponding Author

Hendrik Schmitz

University Duisburg–Essen and RWI

Correspondence to Hendrik Schmitz, University Duisburg–Essen, Fachbereich Wirtschaftswissenschaften, Schützenbahn 70, 45117 Essen, Germany ([email protected]).Search for more papers by this author

First published: 07 December 2012

https://doi.org/10.1111/roiw.12002

Citations: 58

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).

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Abstract

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.

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Volume60, Issue3

September 2014

Pages 525-541

Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?

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Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?

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