The Health Consequences of Debt: Evidence from the Panel Study of Income Dynamics

Adair Crosley, University of Pennsylvania

In the United States, most work in the area of socioeconomic differentials in health and mortality is based on various measures of income and education, but there is growing concern that such measures do not fully capture important aspects of socioeconomic status. Analyses of potential relationships between health and other financial measures, such as income changes over time, wealth, and debt, may provide evidence for the singular importance of these specific measures and, further, may illuminate the mechanisms underlying more general patterns. This paper looks at the relationship between health status and debt. Using data from the Panel Study of Income Dynamics (PSID), I examine whether debt accumulation is associated with self-reported health levels, controlling for income and education. I find evidence that that debt may be an important predictor of health beyond other measures of socioeconomic status including education and income.