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Debt and Mental Health – In Good Times and in Bad

This research project analyzes the relationship between debt and mental health. The project aims at identifying whether the relationship between debt and mental health on the individual level is causal and how the debt-mental health relationship varies in good times and in bad.

Swedish households are highly indebted, both in a historical perspective and compared to households in other countries, and recent statistics indicate that household debt continues to increase. Although a large part of this debt can be attributed to housing loans, it has become more common to lend also for direct consumption. At the same time, mental health – such as depression and anxiety – has become a public health problem, which also associates with poorer economic conditions.

The project aims to generate knowledge regarding the relationship between indebtedness and mental health and to examine I the relationship reflects a causal link. The analysis will take into account that debt problems and ill health often coincide with other life crises and also illustrates how such life crises affect the relationship between debt problems and mental health.

Furthermore, the project intends to study whether high indebtedness has different health consequences for different socioeconomic groups, and if the relationship is affected by the macroeconomic business cycle.