Does debt affect health?: Cross country evidence on the debt-health nexus

Maya Clayton; José Liñares-Zegarra; John O S Wilson

doi:10.1016/j.socscimed.2015.02.002

Does debt affect health? Cross country evidence on the debt-health nexus

Maya Clayton
, José Liñares-Zegarra
, John O S Wilson

Centre for Responsible Banking and Finance

Research output: Contribution to journal › Article › peer-review

Abstract

We investigate the relationship between aggregate household debt and aggregate health outcomes across 17 European countries over the period 1995 to 2012. Using a dataset of country-level standardized and objective measures of household debt, health outcomes and a rich set of control variables, we estimate an instrumental variable (GMM) model to address possible reverse causality concerns. We find that aggregate household debt affects health outcomes, and that this varies by the maturity of debt. Both short and medium-term debt has a positive effect on health outcomes. Long-term unsecured debt and mortgage debt are associated with poorer health outcomes. These findings are robust after controlling for alternative measures of health and debt. Overall, the results suggest that aggregate household debt is an important determinant of aggregate health outcomes across countries.

Original language	English
Pages (from-to)	51-58
Number of pages	8
Journal	Social Science and Medicine
Volume	130
Early online date	7 Feb 2015
DOIs	https://doi.org/10.1016/j.socscimed.2015.02.002
Publication status	Published - Apr 2015

Keywords

Europe
Debt burden
Debt maturity
Health outcomes
Generalized methods of moments
Cross-country data

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10.1016/j.socscimed.2015.02.002

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© 2015. Elsevier Inc. All rights reserved. This is the author’s version of a work that was accepted for publication in Social Science and Medicine. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Social Science & Medicine, 130, April 2015 DOI http://dx.doi.org/10.1016/j.socscimed.2015.02.002
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title = "Does debt affect health?: Cross country evidence on the debt-health nexus",

abstract = "We investigate the relationship between aggregate household debt and aggregate health outcomes across 17 European countries over the period 1995 to 2012. Using a dataset of country-level standardized and objective measures of household debt, health outcomes and a rich set of control variables, we estimate an instrumental variable (GMM) model to address possible reverse causality concerns. We find that aggregate household debt affects health outcomes, and that this varies by the maturity of debt. Both short and medium-term debt has a positive effect on health outcomes. Long-term unsecured debt and mortgage debt are associated with poorer health outcomes. These findings are robust after controlling for alternative measures of health and debt. Overall, the results suggest that aggregate household debt is an important determinant of aggregate health outcomes across countries.",

keywords = "Europe, Debt burden, Debt maturity, Health outcomes, Generalized methods of moments, Cross-country data",

author = "Maya Clayton and Jos{\'e} Li{\~n}ares-Zegarra and Wilson, \{John O S\}",

year = "2015",

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volume = "130",

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TY - JOUR

T1 - Does debt affect health?

T2 - Cross country evidence on the debt-health nexus

AU - Clayton, Maya

AU - Liñares-Zegarra, José

AU - Wilson, John O S

PY - 2015/4

Y1 - 2015/4

N2 - We investigate the relationship between aggregate household debt and aggregate health outcomes across 17 European countries over the period 1995 to 2012. Using a dataset of country-level standardized and objective measures of household debt, health outcomes and a rich set of control variables, we estimate an instrumental variable (GMM) model to address possible reverse causality concerns. We find that aggregate household debt affects health outcomes, and that this varies by the maturity of debt. Both short and medium-term debt has a positive effect on health outcomes. Long-term unsecured debt and mortgage debt are associated with poorer health outcomes. These findings are robust after controlling for alternative measures of health and debt. Overall, the results suggest that aggregate household debt is an important determinant of aggregate health outcomes across countries.

AB - We investigate the relationship between aggregate household debt and aggregate health outcomes across 17 European countries over the period 1995 to 2012. Using a dataset of country-level standardized and objective measures of household debt, health outcomes and a rich set of control variables, we estimate an instrumental variable (GMM) model to address possible reverse causality concerns. We find that aggregate household debt affects health outcomes, and that this varies by the maturity of debt. Both short and medium-term debt has a positive effect on health outcomes. Long-term unsecured debt and mortgage debt are associated with poorer health outcomes. These findings are robust after controlling for alternative measures of health and debt. Overall, the results suggest that aggregate household debt is an important determinant of aggregate health outcomes across countries.

KW - Europe

KW - Debt burden

KW - Debt maturity

KW - Health outcomes

KW - Generalized methods of moments

KW - Cross-country data

UR - http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2429025

U2 - 10.1016/j.socscimed.2015.02.002

DO - 10.1016/j.socscimed.2015.02.002

M3 - Article

C2 - 25681714

SN - 0277-9536

VL - 130

SP - 51

EP - 58

JO - Social Science and Medicine

JF - Social Science and Medicine

ER -

Does debt affect health? Cross country evidence on the debt-health nexus

Abstract

Keywords

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