It has long been accepted that problems with household finances can contribute to everyday stress and even marriage difficulties. But can credit card debt and other short-term overdue bills fuel actual depression?
According to a new study, short-term indebtedness increases depressive symptoms. The association between debt and depression is particularly strong among unmarried people, people reaching retirement age and those who are less well educated, according to the study’s lead author, Lawrence Berger of the University of Wisconsin-Madison.
The findings are believed to be the first to show the impact of different types of debt on depression and their effects on different demographic U.S. sectors. Little evidence was found to establish a similar link between depression and mid- or long-term debt.
Researchers hope the findings can lead to new provisions in loan contracts that would provide for mental health counseling for borrowers who fall behind. Results of the study will be published in the Journal of Family and Economic Issues.
“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.”
New contract provisions could include mandatory financial counseling and the right to rescind within a specified timeframe.
The study focused on 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 found that 79 percent of respondents had some debt, totaling an average of $42,000. Long-term debt accounted for by far the largest portion.
Overall, the study also found that 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.