Household Leverage and Mental Health Fragility
Publikation: Working paper › Forskning
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Household Leverage and Mental Health Fragility. / Andersen, Asger Lau; Jørgensen, Mia Renee Herløv; iyer, rajkamal ; Johannesen, Niels; Peydró, José-Luis.
Centre for Economic Policy Research, CEPR, 2022.Publikation: Working paper › Forskning
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TY - UNPB
T1 - Household Leverage and Mental Health Fragility
AU - Andersen, Asger Lau
AU - Jørgensen, Mia Renee Herløv
AU - iyer, rajkamal
AU - Johannesen, Niels
AU - Peydró, José-Luis
PY - 2022
Y1 - 2022
N2 - We use detailed administrative records to show that high household leverage increases mental health fragility, with persistent negative economic effects. After adverse life events, e.g. heart attacks or job losses, individuals with higher ex ante leverage experience larger increases in mental health problems. The effects are long-lasting and stronger in times of financial crisis. Parallel pre-trends, robustness to non-parametric controls, and IV estimation suggest the results are not driven by confounding unobservables. High leverage is also associated with worse long-run earnings dynamics at the time when loan arrears and mental health problems emerge, suggesting tenacious scarring effects of leverage.
AB - We use detailed administrative records to show that high household leverage increases mental health fragility, with persistent negative economic effects. After adverse life events, e.g. heart attacks or job losses, individuals with higher ex ante leverage experience larger increases in mental health problems. The effects are long-lasting and stronger in times of financial crisis. Parallel pre-trends, robustness to non-parametric controls, and IV estimation suggest the results are not driven by confounding unobservables. High leverage is also associated with worse long-run earnings dynamics at the time when loan arrears and mental health problems emerge, suggesting tenacious scarring effects of leverage.
M3 - Working paper
VL - DP17711
BT - Household Leverage and Mental Health Fragility
PB - Centre for Economic Policy Research, CEPR
ER -
ID: 336945277