Parental Debt Hardship and Socio-Emotional Well-being of Children and Youth

This paper aims to examine the impact of parental debt on children's socio-emotional well-being. Family debt has been increasing since early 1980s (Wagmiller 2003), and a study in U.K. shows that debt is highly associated with one's mental health (Jenkin et al. 2008). However the impact of parental debt on children's well-being is still understudied. In this study, we employ the Panel Study of Income Dynamics 2005-2007 with child development supplement data. Debt hardship is defined as the total family debt greater than or equal to 40 percent of total family income (Wagmiller 2003), and the total year of family debt experienced between 2005 and 2007. The sample includes families with children age 9-18 in 2007. Socio-emotional well-beings are measured by scales adapted from MacArthur MIDUS Youth and work by Corey Keyes measure subjective well-being among youth. The preliminary findings indicate that family debt hardship is negatively associated with social, psychological or emotional well-being of children and youth even after controlling for other socioeconomic and demographic characteristics. We also found that the negative effect of family debt hardship is more prevalent for African-American youth than White youth.