A new study finds that being behind on paying credit cards and having overdue household bills increases depressive symptoms.
Researchers found the link to be particularly strong among unmarried people, people reaching retirement age and those who are less well educated.
Investigators also looked at whether mid or long-term debt influenced depressive symptoms and found little evidence that being in arrears for this type of debt is linked to depression.
According to lead author Lawrence Berger of the University of Wisconsin-Madison, this is the first study to show the impact of different types of debt on depression and their effects on different sectors of the US population.
Results of the study will be published in a forthcoming issue of the Journal of Family and Economic Issues.
The findings could lead to new lending strategies that may help to minimize the financial stress.
“New debt contracts could be offered to vulnerable borrowers and the population sectors we identified could be targeted with help in building their financial capacity,” says Berger.
“The findings could also be used to help mental health practitioners better understand the impact of clients’ borrowing habits on depression.”
Debt contract provisions could include mandatory financial counselling and the right to rescind within a specified timeframe.
Those who had debt were younger, more likely to be male, less likely to be black or Hispanic, had more highly educated parents, were more highly educated themselves, were more likely to be married and working, had greater income and assets, and were in better health.
When the researchers began to adjust for measures of socio-economic status, and to refine their analysis to subgroups defined by age, education and marital status the negative association began to emerge.
Investigators controlled for reverse causality so as to be certain that debt was causing depression and not vice versa.
The study was focused on around 8,500 working-age adults. The data were taken from two waves of the National Survey of Families and Households, conducted six years apart and ending in 1994. Overall findings included the fact that 79 percent of respondents had some debt, totaling an average of $42,000. Long-term debt accounted for by far the largest portion.
Low interest rates and favorable economic conditions have increased home ownership dramatically in the last 40 years, However, unsecured revolving credit card debt and household debt have also become an issue.
The researchers suggest that future research should include an analysis of whether the effects can be reversed and reducing short-term debt can help alleviate symptoms of depression.