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Owing More and Feeling Worse

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While we may consider the reasons we go into debt – from falling prey to strategic advertising that encourages us to buy now and pay later, and thinking we are in a better position to pay our bills than we are, to being taken advantage of by overzealous lenders, or failing to exert financial self-control – the result is the same: We are mired in debt.

The question is: Just how much does this affect our mental health?

 Focusing on about 8,500 working-age adults, Lawrence Berger of the University of Wisconsin-Madison and his research team took data from two waves of the National Survey of Families and Households, conducted six years apart and ending in 1994.

While it was not surprising that 79 percent of respondents had some debt – totaling an average of $42,000 – the results were the first to show the impact of different types of debt on depression and their effects on different sectors of the US population.

Adjusting for measures of socio-economic status, and refining their analysis to subgroups defined by age, education and marital status, a clear association between debt and depression began to emerge. To be sure that depressed people weren’t simply more likely to go into debt, Berger and his team controlled for reverse causality and had the same results (Berger et al., 2015).

“The findings could also be used to help mental health practitioners better understand the impact of clients’ borrowing habits on depression” (Berger, 2015).

Another study found similar results.

Carrying out a systematic review on all previous research that looked at the relationship between health problems and unsecured debt, researchers from the University of Southampton, along with a researcher from Kingston University, conducted a ‘meta-analysis’ to statistically combine the results of previous studies involving nearly 34,000 participants.

The results were compelling.

Those in debt were more than three times more likely to have a mental health problem as those who were not in debt. Further, less than nine per cent of participants with no mental health problems were in debt, compared to more than a quarter of participants being in debt and with a mental health problem. Specifically, those in debt were also more likely to suffer from depression, drug dependence and psychosis, and suicide (Richardson et al., 2016).

Dr. Thomas Richardson, Clinical Psychologist from the University of Southampton who led the research, concluded, “This research shows a strong relationship between debt and mental health; however it is hard to say which causes which at this stage. It might be that debt leads to worse mental health due to the stress it causes. It may also be that those with mental health problems are more prone to debt because of other factors, such as erratic employment. Equally it might be that the relationship works both ways. For example people who are depressed may struggle to cope financially and get into debt, which then sends them deeper into depression” (Richardson et al., 2016).

“Debt advisors should consider asking about mental health when speaking to members of the public. Similarly mental health professionals should ensure they ask about whether their patients are in debt” (Richardson, 2016).

As there is currently around $156 billion in unsecured debt such as credit cards in the UK – of which the average family owes more than $11,000 – and levels of debt have increased in recent years due to the economic recession and are predicted to increase further, the issue of debt is especially relevant to students, and has left many asking: What is the psychological cost of massive student loan debt?

To find an answer, researchers at the University of South Carolina and the University of California, Los Angeles used data from the National Longitudinal Survey of Youth 1997, a nationally representative sample of young adults in the Unites States and posed the following two questions: What is the association between the amount of debt that students accrue during undergraduate studies and their mental well-being post-graduation, when they are between the ages of 25 and 31; and what is the association between annual student loan borrowing and the mental well-being of currently enrolled students?

Even with adjustments for parental wealth, childhood socioeconomic status, and other factors, debt emerged as a major contributor to mental health problems such that those who had higher amounts of debt incurred from student loans reported higher levels of depressive symptoms (Walsemann et al., 2015)

“We are speculating that part of the reason that these types of loans are so stressful is the fact that you cannot defer them, they follow you for the rest of your life until you pay them off” Walsemann, 2015).

Walsemann’s study is particularly significant given the ongoing rise in the costs of obtaining a college degree. In 2012, student loan debt totaled over $1 trillion in the United States, making this type of loan second only to home mortgage debt. “We speculate that the American middle class is suffering the most from post-graduation debt, since they do not qualify for governmental assistance, nor is their family able to take on the bulk of the costs associated with college,” explains Walsemann (Walsemann, 2015).

While further research will likely reveal how student loan debt affects other life decisions, such as occupational choices or delaying marriage and children, and other health inequities, another study found that the effects of debt are not just psychological.

The study, done by researchers at Northwestern Medicine, and published in Social Science and Medicine, offers a glimpse into the impact debt may have on the health of young Americans.

Using data from the National Longitudinal Study of Adolescent Health, Elizabeth Sweet, an assistant professor of medical social sciences at Northwestern University Feinberg School of Medicine and a faculty associate of Cells to Society (C2S): The Center on Social Disparities and Health, at the Institute for Policy Research at Northwestern and her team explored the association between debt and both psychological and general health outcomes in 8,400 young adults, ages 24 to 32 years old.

Personal financial debt was measured in two ways. Participants were asked about their debt-to-asset ratio by answering this question: “Suppose you and others in your household were to sell all of your major possessions (including your home), turn all of your investments and other assets into cash, and pay off all of your debts. Would you have something left over, break even or be in debt?”

Second, participants were asked how much debt, besides a home mortgage, they owe. Response categories ranged from “less than $1,000” to “$250,000 or more.”

Perceived stress, depressive symptoms, and general health were measured through a series of questions. Both systolic and diastolic blood pressures were measured for each participant by a field interviewer.

Here are some key findings of the study:

  • Twenty percent of participants reported that they would still be in debt if they liquidated all of their assets (high debt-to-asset-ratio).
  • A higher debt-to-asset ratio was associated with higher perceived stress and depression, worse self-reported general health, and higher diastolic blood pressure.
  • Those with greater debt were found to have a 1.3 percent increase (relative to the mean) in diastolic blood pressure — which is clinically significant. A two-point increase in diastolic blood pressure, for example, is associated with a 17 percent higher risk of hypertension and a 15 percent higher risk of stroke.
  • Individuals with high compared to low debt reported larger levels of perceived stress (representing an 11.7 percent increase relative to the mean) and higher depressive symptoms (a 13.2 percent increase relative to the mean) (Sweet et al., 2016).

“We now live in a debt-fueled economy. Since the 1980s American household debt has tripled. It’s important to understand the health consequences associated with debt” (Sweet, 2016).

Sweet notes that while we wouldn’t necessarily expect to see associations between debt and physical health in people who are so young, it is an association we need to be aware of.

Similar results were found in a study exploring the relationship between financial stress and health-related behavior in the workplace.

Examining the behavior of 423 adult Midwesterners who smoked daily, Jon Macy, lead author of both studies and assistant professor in the Department of Applied Health Science at the School of Public Health-Bloomington and his team assessed whether smoking increased when work and life stress affected their lives.

Then, in a second study, the researchers looked at health behaviors practiced by almost 4,000 men and women before and after the recession began in 2008.

Participants for both studies were drawn from the IU Smoking Survey, a longitudinal study that began in 1980 and involved 3,984 men and women ages of 37 to 50.

The researchers asked study participants about five health behaviors:

  • Whether they looked at food labels to determine food’s health value when they shopped.
  • How often they chose what to eat based on food’s health value.
  • How frequently they performed vigorous physical activity.
  • Whether they always wore seatbelts.
  • Whether they smoked.

They looked for a relationship between these behaviors and three work-related factors:

  • Change in work hours.
  • Change in employment status — full time, part time, unemployed, temporarily laid off or student employment.
  • Financial strain related to basic needs.

The results were fascinating. While health behaviors, such as exercise and attention to nutrition, generally improved as the recession set in – for study participants who reported financial strain, all measures of health-related behavior declined (Macy et al., 2016).

“Those most affected by the recession, those with the most financial strain, were least likely to abstain from smoking, to exercise, or to engage in healthy eating behaviors” (Macy, 2016).

Results like this might be explained by the way in which financial stress affects our pain tolerance – which, because we must trade short-term gains for long-term ones and delay gratification, is an important part of engaging in health-related behavior.

Stemming from an observation of two co-occurring trends: increasing economic insecurity and increasing complaints of physical pain, Eileen Chou of the University of Virginia and colleagues Bidhan Parmar (University of Virginia) and Adam Galinsky (Columbia University), used data from a diverse consumer panel of 33,720 individuals to reveal that households in which both adults were unemployed spent 20% more on over-the-counter painkillers in 2008 compared with households in which at least one adult was working (Chou et al., 2016).

The results were replicated in an online study with 187 participants that indicated that two measures of economic insecurity – participants’ own unemployment and stated-level insecurity – were correlated with participants’ reports of pain, as measured by a four-item pain scale (Chou et al., 2016).

In another online study, participants who recalled a period of economic instability reported almost double the amount of physical pain than did participants who recalled an economically stable period. Moreover, this association remained even after the researchers took other factors – including age, employment status, and negative emotion – into account (Chou et al., 2016).

Evidence from a lab-based study also found a link between economic insecurity and tolerance for pain. Student participants who were prompted to think about an uncertain job market showed a decrease in pain tolerance, measured by how long they could comfortably keep their hand in a bucket of ice water; while students who were prompted to think about entering a stable job market showed no change in pain tolerance (Chou et al., 2016).

“Overall, our findings reveal that it physically hurts to be economically insecure. Results from six studies establish that economic insecurity produces physical pain, reduces pain tolerance, and predicts over-the-counter painkiller consumption” (Chou, 2016).

Chou and her team suggest that feelings of economic insecurity lead people to feel a lack of control in their lives, which would, in turn, activate psychological processes associated with anxiety, fear, and stress – the same psychological processes that have been shown to share similar neural mechanisms to those underlying pain.

This hypothesis was supported by the finding that the degree to which participants felt in control of their lives helped to account for the association between feelings of economic insecurity and reports of physical pain (Chou et al., 2016).

The takeaway is that subjective experience matters. Chou explains, “Individuals’ subjective interpretation of their own economic security has crucial consequences above and beyond those of objective economic status,” (Chou, 2016).

Our interpretation of our financial situation has significant physical and psychological effects on our personal health, yet a national economic crisis – like the one seen in 2008 – have a much broader impact on a society’s health.

As the second largest economy in the European Union and one of the largest financial hubs in the world, the United Kingdom was one of the countries hit the hardest by the Great Recession in 2008. The UK shrunk by 4.3% in 2009 alone and the government had to bail out and nationalize large domestic banks, leading to increased government debt and deficit.

To explore this issue and its impact on health, Professor Mireia Jofre-Bonet from the Department of Economics at City, University of London and her colleagues looked at data from the Health Survey for England (HSE), a cross-sectional survey taken yearly from a representative sample of about 9,000 English households. They specifically used data on respondents above 16 years of age for the period 2001-2013. In addition to socio-economic characteristics, the HSE includes information on a wide range of health lifestyles and health conditions.

The results of the study found that the start of the recession was associated with worse dietary habits and increased BMI and obesity, as well as a shift away from risky behaviors, such as smoking and alcohol consumption. During this time, there was also an increase in the use of medicines and a higher likelihood of suffering diabetes and mental health problems, all of which were generally experienced more acutely by women and those with less education. Specifically, the probability of being obese and severely obese increased by 4.1 and 2.4 percentage points respectively. Similarly, the probability of having diabetes was 1.5 percentage points higher after 2008, with the prevalence of mental health problems increasing by four percentage points (Jofre-Bonet et al., 2018).

Mireia Jofre-Bonet explains the findings, “Our study confirms the close relationship between health and the economic environment as we found that the 2008 Great Recession led to a decrease in risky behavior, such as smoking and drinking, but also an increase in the likelihood of obesity, diabetes and mental health problems” (Jofre-Bonet, 2018).

The findings also have number of important policy considerations, notes Jofre-Bonet. In particular, that those less-educated were more vulnerable to the health effects of the recession (Jofre-Bonet, 2018).

Whether leading to increased depression and anxiety, impaired physical health and health-related behavior, decreased pain tolerance or large-scale increases in diabetes, obesity, and mental health problems, the conclusion is the same: when we owe more, we feel worse.

Photo by Cooperweb

Owing More and Feeling Worse

Claire Dorotik-Nana, LMFT

Claire Dorotik-Nana LMFT is a licensed marriage and family therapist specializing in post-traumatic growth, leveraging adversity, and other epic human achievements. Claire has written multiple continuing education courses for Professional Development Resources, Zur Institute, and International Sport Science Association. Claire has also authored multiple books, including:
Leverage: The Science of Turning Setbacks into Springboards and On The Back Of A Horse: Harnessing The Healing Power Of The Human-Equine Bond. For more information about Leveraging Adversity or Claire, visit

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APA Reference
Dorotik-Nana, C. (2018). Owing More and Feeling Worse. Psych Central. Retrieved on May 31, 2020, from


Last updated: 29 Jun 2018
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