The sword of damocles: Debt and depression

Zhou, Jun; Korkmaz, Aslihan Gizem; Li, Youwei; Yue, Pengpeng; Yan, Yuhan

Abstract

This paper investigates the heterogeneous effects of formal and informal debt on mental health. We use unique data on Chinese households between 2014 and 2018 to examine the relationship between household debt obtained from different sources and the possibility of suffering from depression. Our main findings indicate that indebtedness is linked to depression and impairs borrowers’ mental health and other health conditions. Furthermore, we suggest that this negative impact is mainly due to borrowing from informal creditors, whereas debt obtained from formal sources has a negligible impact on depression.

Citation

Zhou, J., Korkmaz, A. G., Li, Y., Yue, P., & Yan, Y. (2025). The sword of damocles: Debt and depression. International review of financial analysis, 98, Article 103877. https://doi.org/10.1016/j.irfa.2024.103877

• Journal Article Type: Article
• Acceptance Date: Dec 13, 2024
• Online Publication Date: Dec 19, 2024
• Publication Date: Feb 1, 2025
• Deposit Date: Jan 7, 2025
• Publicly Available Date: Jun 20, 2026
• Journal: International Review of Financial Analysis
• Print ISSN: 1057-5219
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 98
• Article Number: 103877
• DOI: https://doi.org/10.1016/j.irfa.2024.103877
• Public URL: https://hull-repository.worktribe.com/output/5001854