Elsevier

Public Health

Volume 128, Issue 3, March 2014, Pages 239-245
Public Health

Original Research
Mortgage debt as a moderator in the association between unemployment and health

https://doi.org/10.1016/j.puhe.2013.12.012Get rights and content

Abstract

Objective

While homeownership is generally viewed as good for society, the consequences of the concomitant mortgage debt have not been well examined. This study investigates the role of mortgage debt as a moderator in the relationship between unemployment and health.

Study design

A cross-sectional analysis of a representative sample of US homeowners aged 38–46 surveyed in 1998–2006.

Methods

Subjects were 3667 adults living in owned homes aged 38–46 who reported being either employed or unemployed. Logistic models were performed using maximum likelihood estimation to estimate the relative risk of self-reporting fair or poor health with regard to employment status and how employment status interacted with mortgage status.

Results

Among homeowners, being unemployed for more than 13 weeks with a mortgage is associated with a higher likelihood of reporting fair or poor health (odds ratio 2.38, 95% confidence interval 1.28–4.45). Being unemployed for more than 13 weeks with a mortgage loan that is more than 80% of the value of the home is associated with a greater likelihood of reporting fair or poor health (odds ratio 8.99, 95% confidence interval 2.50–32.29).

Conclusion

Among homeowners, mortgage debt increases the association between unemployment and poor health. In an economy where periods of high unemployment are likely to coincide with periods of falling home prices, homeowners may find themselves unemployed just when their homes lose value, intensifying financial stress.

Introduction

In theory, there are a number of pathways through which unemployment can impair health. Unemployment can indirectly affect health through reducing health care spending or foregoing health insurance coverage. Unemployment can directly affect health through financial stress. Epidemiological studies have found that stress plays a role in cardiovascular disease,1 and affects both the contraction and progression of certain diseases.2, 3 Conversely, poor health can lead to unemployment. Previous studies have shown that those in poor health are selected for unemployment4 and that unemployment spells are longer for individuals with health problems.5 Therefore, the association between unemployment and health status reflects causal pathways in both directions.

Previous studies have examined the association between unemployment and mental health and found that unemployment was associated with an increase in depressive symptoms and heavy drinking.6, 7, 8, 9, 10, 11 Other studies have examined unemployment and mortality and documented that unemployment significantly increased mortality rates in the short-run.12, 13, 14, 15, 16 Studies that used self-rated health as an outcome found that job loss was positively associated with poorer overall self-rated health17 and negatively associated with health satisfaction.18 However, other studies have concluded that job loss was not significantly associated with self-rated health19 nor was it associated with hospitalizations for stress-related diseases.20

Existing studies have not differentiated unemployed individuals by homeownership status or mortgage indebtedness. If financial stress, as represented by mortgage indebtedness, modifies the relationship between unemployment and health, then it may help to explain some of the mixed findings in the literature. Although homeowners generally have better health status compared to renters,21, 22 it has been hypothesized that there are differences in the association between unemployment duration and health status among homeowners that arise from mortgage indebtedness.

The hypothesis was tested with the data from the National Longitudinal Survey of Youth (NLSY) 1979 cohort. This is the first study to directly incorporate mortgage debt into the relationship between health and unemployment. Previous studies have separately documented the relationship between health and unemployment4, 7, 18, 23, 24 or health and debt.25, 26, 27 Recognizing that having poor health both reduces the ability to work and increases borrowing to cover medical expenses, this study models the relationship between health and unemployment interacting with mortgage debt at the same time adjusting for relevant socio-economic characteristics such as the household's net worth.

Incorporating mortgage debt in the association between unemployment and health is important because, according to the U.S. Census Bureau, as of 2009, there were 74.5 million household homeowners and while a minority outright own their homes with no mortgage, 67.5% had mortgages. Moreover, 95% of all new single-family homes were purchased with a mortgage in 2009. Although mortgage debt is increasingly the norm, the role of debt in the relationship between unemployment and health has not been documented and homeownership through mortgage financing may alter the relationship. A homeowner who is unable to maintain monthly mortgage payments must sell his home, potentially during unfavourable market conditions, or risk foreclosure. As a result, mortgage financing can intensify the financial stress of unemployment precipitating a decline in health status.

Section snippets

Study sample

The individual level data from the National Longitudinal Survey of Youth (NLSY), a nationally representative survey administered by the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor was used in this study. The 1979 cohort consists of individuals born between years 1957 and 1964. An extended health module was administered after a respondent turns forty years of age (40+ health module) which for the 1979 cohort, corresponded to waves 1998, 2000, 2002, 2004, and 2006. A

Results

Table 1 shows the sample-weighted variable means for the samples of all homeowners (n = 3667), homeowners with a mortgage (n = 457), homeowners without a mortgage (n = 3210), and homeowners with a high LTV mortgage (n = 582). 88% of homeowners in the sample have a mortgage loan and 14% had a high LTV mortgage, that is, a mortgage loan-to-home value ratio greater than 80%. The average mortgage amount was 93,410 dollars compared to an average home value of 196,560 dollars. Homeowners with high

Discussion

Studies on the relationship between unemployment and health have neglected the role of debt. Using a sample of homeowners, it has been examined whether mortgage debt modifies the relationship between unemployment and health by more strongly linking the consequences of each. The results show that unemployment is not associated with poorer health among homeowners except when the homeowner has a mortgage and when the association is stronger, the greater the debt burden. This is consistent with the

Author statements

The authors are grateful to Amal Trivedi, David Jaeger, Michael Grossman, and Ted Joyce for helpful comments.

Ethical approval

None sought. Ethical approval was not required for this paper as it represents a secondary analysis of the data from a public use population survey published by the Department of Labor Bureau of Labor Statistics.

Funding

None declared.

Competing interests

None declared.

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