Table 1.
Descriptive Statistics
| Variables | Mean | SD | Min | Med | Max |
|---|---|---|---|---|---|
| Debt Ownership | |||||
| Buy Now Pay Later (BNPL) | 0.20 | 0.40 | 0.00 | 0.00 | 1.00 |
| Credit Card | 0.61 | 0.49 | 0.00 | 1.00 | 1.00 |
| Personal Loan | 0.14 | 0.34 | 0.00 | 0.00 | 1.00 |
| Mortgage | 0.33 | 0.47 | 0.00 | 0.00 | 1.00 |
| High Mortgage Debt | 0.28 | 0.45 | 0.00 | 0.00 | 1.00 |
| Long-term Debt | 0.41 | 0.49 | 0.00 | 0.00 | 1.00 |
| Mental Health | |||||
| Good Mental | 0.93 | 0.25 | 0.00 | 1.00 | 1.00 |
| Poor Mental | 0.07 | 0.25 | 0.00 | 0.00 | 1.00 |
| Financial access, information, and confidence | |||||
| Financial Accessibility Score (0–100) | 23.88 | 13.18 | 0.00 | 21.43 | 100.00 |
| Formal Channel Score (0–100) | 11.23 | 13.04 | 0.00 | 11.11 | 100.00 |
| Informal Channel Score (0–100) | 12.99 | 15.07 | 0.00 | 12.50 | 100.00 |
| Financial Confidence Score (0–100) | 74.48 | 20.80 | 0.00 | 75.00 | 100.00 |
| Early Parental Guidance | 0.35 | 0.48 | 0.00 | 0.00 | 1.00 |
| Demographics | |||||
| Gender(%) | |||||
| Male | 0.48 | 0.50 | 0.00 | 0.00 | 1.00 |
| Female | 0.52 | 0.50 | 0.00 | 1.00 | 1.00 |
| Region(%) | |||||
| Auckland | 0.33 | 0.47 | 0.00 | 0.00 | 1.00 |
| Northland | 0.04 | 0.18 | 0.00 | 0.00 | 1.00 |
| Waikato | 0.09 | 0.28 | 0.00 | 0.00 | 1.00 |
| Bay of Plenty | 0.06 | 0.24 | 0.00 | 0.00 | 1.00 |
| Wellington | 0.11 | 0.32 | 0.00 | 0.00 | 1.00 |
| Other North Island | 0.13 | 0.33 | 0.00 | 0.00 | 1.00 |
| Canterbury | 0.13 | 0.34 | 0.00 | 0.00 | 1.00 |
| Otago | 0.05 | 0.21 | 0.00 | 0.00 | 1.00 |
| Other South Island | 0.06 | 0.24 | 0.00 | 0.00 | 1.00 |
| Education(%) | |||||
| Lower Secondary and below | 0.13 | 0.34 | 0.00 | 0.00 | 1.00 |
| Upper Secondary | 0.13 | 0.34 | 0.00 | 0.00 | 1.00 |
| Vocational education | 0.27 | 0.45 | 0.00 | 0.00 | 1.00 |
| Undergraduate and Postgraduate | 0.46 | 0.50 | 0.00 | 0.00 | 1.00 |
| Income(%) | |||||
| Low Income(<$60k) | 0.38 | 0.49 | 0.00 | 0.00 | 1.00 |
| Middle Income($60k–$100k) | 0.29 | 0.45 | 0.00 | 0.00 | 1.00 |
| High Income($100k+) | 0.34 | 0.47 | 0.00 | 0.00 | 1.00 |
| Age(%) | |||||
| 18 – 24 | 0.10 | 0.30 | 0.00 | 0.00 | 1.00 |
| 25 – 34 | 0.19 | 0.40 | 0.00 | 0.00 | 1.00 |
| 35 – 49 | 0.25 | 0.44 | 0.00 | 0.00 | 1.00 |
| 50 – 64 | 0.24 | 0.43 | 0.00 | 0.00 | 1.00 |
| 65+ | 0.20 | 0.40 | 0.00 | 0.00 | 1.00 |
| Race(%) | |||||
| New Zealand European | 0.73 | 0.44 | 0.00 | 1.00 | 1.00 |
| Maori | 0.10 | 0.30 | 0.00 | 0.00 | 1.00 |
| Pacific Peoples | 0.03 | 0.17 | 0.00 | 0.00 | 1.00 |
| Asian | 0.08 | 0.27 | 0.00 | 0.00 | 1.00 |
| Indian | 0.04 | 0.19 | 0.00 | 0.00 | 1.00 |
| Other | 0.02 | 0.14 | 0.00 | 0.00 | 1.00 |
| Socio-economic life events | |||||
| Illness preventing work for 2+ months | 0.08 | 0.27 | 0.00 | 0.00 | 1.00 |
| Death of partner | 0.01 | 0.12 | 0.00 | 0.00 | 1.00 |
| Job loss or redundancy leading to unemployment | 0.09 | 0.28 | 0.00 | 0.00 | 1.00 |
| Left work to care for family member or friend full time | 0.03 | 0.17 | 0.00 | 0.00 | 1.00 |
[i] Table 1 presents the descriptive statistics for the variables used in this study. The debt ownership includes variables such as buy-now-pay-later (BNPL), credit cards, personal loans, and mortgages, as well as high non-mortgage debt, high mortgage debt, and the long-term debt indicator. Mental health highlights the proportion of respondents with good and poor mental health. Financial access, information, and confidence factors capture financial accessibility, usage of formal and informal financial channels, and early parental guidance. Demographic variables, such as gender, age, education, income, and race, provide insights into the sample’s diversity, while socio-economic life event indicators capture significant events such as illness, partner death, job loss, or caregiving responsibilities.
Table 2.
Probit Regression Results for the Likelihood of Holding Debt
| BNPL | Credit Card | Personal Loan | Mortgage | |
|---|---|---|---|---|
| Poor Mental Health | −0.0176 (0.04) | −0.0583 (0.048) | −0.0686* (0.04) | −0.1202** (0.049) |
| Female | 0.0869*** (0.021) | 0.0093 (0.023) | 0.0209 (0.019) | 0.0157 (0.023) |
| Region (Ref: Auckland) | ||||
| Northland | −0.0062 (0.052) | −0.1420** (0.065) | 0.054 (0.057) | −0.039 (0.059) |
| Waikato | 0.0038 (0.04) | −0.0661 (0.046) | −0.0255 (0.031) | −0.0157 (0.044) |
| Bay of Plenty | 0.0984* (0.052) | −0.0323 (0.049) | 0.0614 (0.042) | −0.0235 (0.05) |
| Wellington | −0.0023 (0.036) | −0.051 (0.042) | 0.021 (0.031) | 0.0358 (0.039) |
| Other North Island | 0.0880** (0.038) | −0.1051*** (0.04) | 0.0703** (0.034) | 0.0623 (0.04) |
| Canterbury | −0.0003 (0.033) | −0.0047 (0.038) | 0.0546* (0.032) | 0.1288*** (0.038) |
| Otago | 0.0082 (0.051) | −0.0525 (0.058) | 0.0319 (0.043) | 0.0577 (0.055) |
| Other South Island | −0.0357 (0.04) | 0.0095 (0.049) | 0.0629 (0.042) | 0.0676 (0.049) |
| Education (Ref: Lower Secondary and below) | ||||
| Upper Secondary | −0.0509 (0.041) | −0.0083 (0.048) | −0.0443 (0.036) | −0.0192 (0.048) |
| Vocational education | 0.0526 (0.038) | 0.0361 (0.04) | 0.0072 (0.033) | 0.0186 (0.041) |
| Undergraduate and Postgraduate | −0.0457 (0.035) | 0.1096*** (0.038) | −0.0107 (0.031) | 0.0217 (0.039) |
| Income (Ref: Low Income) | ||||
| Middle Income($60k–$100k) | 0.0032 (0.027) | 0.1950*** (0.031) | 0.0570** (0.023) | 0.2079*** (0.029) |
| High Income($100k+) | −0.0041 (0.026) | 0.2565*** (0.03) | 0.0679*** (0.023) | 0.3382*** (0.03) |
| Age (Ref: 18–24) | ||||
| 25 – 34 | −0.0013 (0.05) | 0.1564*** (0.05) | 0.021 (0.039) | 0.1401*** (0.043) |
| 35 – 49 | −0.0746 (0.048) | 0.3477*** (0.048) | 0.0827** (0.039) | 0.3305*** (0.043) |
| 50 – 64 | −0.1952*** (0.047) | 0.4123*** (0.049) | −0.0248 (0.037) | 0.2888*** (0.044) |
| 65+ | −0.2908*** (0.045) | 0.5805*** (0.047) | −0.0967*** (0.035) | 0.0157 (0.043) |
| Race (Ref: New Zealand European) | ||||
| Maori | 0.0647* (0.037) | −0.0534 (0.04) | 0.0525 (0.034) | −0.0419 (0.038) |
| Pacific Peoples | 0.0431 (0.061) | −0.1882** (0.086) | 0.0577 (0.063) | −0.1787*** (0.059) |
| Asian | −0.014 (0.038) | 0.0179 (0.047) | −0.0285 (0.031) | −0.1312*** (0.04) |
| Indian | 0.1082* (0.063) | −0.053 (0.069) | −0.0269 (0.045) | −0.1029* (0.061) |
| Other | −0.1489*** (0.046) | −0.2036** (0.091) | −0.0633 (0.053) | −0.0246 (0.093) |
| Illness preventing work for 2+ months | 0.0863** (0.037) | −0.0642 (0.042) | 0.0237 (0.032) | −0.0432 (0.043) |
| Death of partner | 0.0058 (0.088) | 0.0017 (0.107) | 0.084 (0.07) | 0.0507 (0.096) |
| Job loss or redundancy leading to unemployment | 0.0308 (0.035) | −0.0158 (0.045) | 0.0509 (0.032) | −0.0728* (0.042) |
| Left work to care for family members or friends full-time | −0.0723 (0.058) | 0.0576 (0.072) | 0.0231 (0.047) | 0.1241* (0.065) |
| Observations | 1333 | 1333 | 1333 | 1333 |
| McFadden pseudo R2 | 0.1345 | 0.1901 | 0.0836 | 0.2074 |
[i] Table 2 presents the results of probit regression analyses examining the likelihood of respondents holding various forms of debt, including buy-now-pay-later (BNPL), credit cards, personal loans, and mortgages. The independent variables include key factors such as mental health, demographic characteristics, and socio-economic life events. The coefficients represent the marginal effects of each variable on the probability of holding specific types of debt, enabling an interpretation of both the statistical and economic significance of the findings.
Table 3.
Probit Regression Results for Debt Levels
| High Mortgage Debt | |
|---|---|
| Poor Mental Health | −0.0941* (0.052) |
| Female | 0.0443* (0.025) |
| Region (Ref: Auckland) | |
| Northland | −0.0073 (0.066) |
| Waikato | −0.0473 (0.048) |
| Bay of Plenty | 0.0146 (0.060) |
| Wellington | 0.0174 (0.044) |
| Other North Island | 0.0492 (0.047) |
| Canterbury | 0.1484*** (0.043) |
| Otago | −0.0000 (0.060) |
| Other South Island | 0.1175** (0.058) |
| Education (Ref: Lower Secondary and below) | |
| Upper Secondary | 0.0429 (0.054) |
| Vocational education | 0.0655 (0.047) |
| Undergraduate and Postgraduate | 0.1182*** (0.045) |
| Income (Ref: Low Income) | |
| Middle Income($60k–$100k) | 0.2275*** (0.033) |
| High Income($100k+) | 0.3664*** (0.032) |
| Age (Ref: 18–24) | |
| 25 – 34 | 0.1228*** (0.042) |
| 35 – 49 | 0.3172*** (0.042) |
| 50 – 64 | 0.2326*** (0.042) |
| Race (Ref: New Zealand European) | |
| Maori | −0.0256 (0.042) |
| Pacific Peoples | −0.2102*** (0.064) |
| Asian | −0.1478*** (0.044) |
| Indian | −0.1053 (0.067) |
| Other | −0.1520** (0.076) |
| Illness preventing work for 2+ months | −0.0545 (0.049) |
| Death of partner | 0.0793 (0.120) |
| Job loss or redundancy leading to unemployment | −0.0896* (0.047) |
| Left work to care for family members or friends full-time | 0.1146 (0.070) |
| Observations | 1043 |
| McFadden pseudo R2 | 0.2059 |
[i] Table 3 presents the results of probit regression analyses examining the likelihood of respondents holding high levels of mortgage debt. The independent variables include key factors such as mental health, demographic characteristics, and socio-economic life events. The coefficients represent the marginal effects of each variable on the probability of holding specific types of debt, enabling an interpretation of both the statistical and economic significance of the findings.
Table 4.
Oaxaca Decomposition of Long-Term Debt Disparities by Mental Health Status
| Panel 1: Difference in Estimates | ||
| Coefficient | ||
| Good Mental | 0.4402*** (0.014) | |
| Poor Mental | 0.2500*** (0.051) | |
| Difference | 0.1902*** (0.053) | |
| Panel 2: Explained the difference | ||
| Coefficient | Percentage Explained | |
| Financial Accessibility Score (0–100) | 0.0868*** (0.020) | 77.22% |
| Formal Channel Score (0–100) | 0.0021 (0.003) | 1.94% |
| Informal Channel Score (0–100) | −0.0109* (0.006) | −9.70% |
| Financial Confidence Score (0–100) | −0.0002 (0.001) | −0.18% |
| Total | 0.1124** (0.049) | 69.29% |
| Observations | 1333 | |
[i] Table 4 displays the outcomes of the Oaxaca decomposition analysis, which investigates the differences in long-term debt ownership between those with good mental health and those with poor mental health. Panel 1 highlights the coefficient differences, while Panel 2 presents the decomposition results for various factors, including financial accessibility, usage of formal channels, usage of informal channels, and financial confidence. For each decomposition, the first column indicates the component’s contribution to the long-term debt disparities between the two mental health groups, whereas the second column (%) illustrates the proportion of the gap accounted for.
Table 5.
The Role of Parental Guidance
| Low Guidance Group | High Parental Guidance Group | |||
|---|---|---|---|---|
| Personal Loan | Mortgage | Personal Loan | Mortgage | |
| Poor Mental Health | −0.1034** (0.050) | −0.1560*** (0.058) | 0.0126 (0.070) | 0.1129 (0.094) |
| Female | 0.0090 (0.024) | 0.0513* (0.028) | 0.0188 (0.031) | −0.0686* (0.040) |
| Region (Ref: Auckland) | ||||
| Northland | 0.1019 (0.080) | 0.0247 (0.076) | 0.0000 (.) | −0.1839** (0.088) |
| Waikato | −0.0248 (0.042) | 0.0595 (0.054) | −0.0305 (0.041) | −0.1345* (0.074) |
| Bay of Plenty | 0.0694 (0.057) | −0.0705 (0.060) | 0.0885 (0.085) | 0.0608 (0.088) |
| Wellington | −0.0197 (0.039) | −0.0251 (0.047) | 0.0981* (0.055) | 0.1339** (0.068) |
| Other North Island | 0.0235 (0.041) | 0.0590 (0.050) | 0.1606*** (0.062) | 0.0407 (0.071) |
| Canterbury | 0.0086 (0.038) | 0.1026** (0.047) | 0.1184** (0.055) | 0.1619** (0.066) |
| Otago | 0.0449 (0.056) | 0.0306 (0.067) | −0.0206 (0.058) | 0.0960 (0.098) |
| Other South Island | 0.0518 (0.050) | 0.0498 (0.055) | 0.0083 (0.083) | 0.0703 (0.109) |
| Education (Ref: Lower Secondary and below) | ||||
| Upper Secondary | −0.0723 (0.045) | −0.0220 (0.060) | 0.0159 (0.060) | −0.0352 (0.085) |
| Vocational education | −0.0127 (0.041) | −0.0243 (0.050) | 0.0539 (0.056) | 0.1088 (0.076) |
| Undergraduate and Postgraduate | −0.0260 (0.039) | −0.0108 (0.047) | 0.0472 (0.053) | 0.0726 (0.072) |
| Income (Ref: Low Income) | ||||
| Middle Income($60k–$100k) | 0.0560* (0.029) | 0.2312*** (0.035) | 0.0718* (0.038) | 0.1580*** (0.055) |
| High Income($100k+) | 0.0534* (0.029) | 0.3332*** (0.036) | 0.0912** (0.041) | 0.3588*** (0.058) |
| Age (Ref: 18–24) | ||||
| 25 – 34 | 0.0334 (0.049) | 0.1316** (0.055) | 0.0298 (0.068) | 0.2064*** (0.068) |
| 35 – 49 | 0.1163** (0.049) | 0.3405*** (0.054) | 0.0597 (0.069) | 0.3862*** (0.069) |
| 50 – 64 | 0.0179 (0.047) | 0.3090*** (0.055) | −0.0704 (0.063) | 0.2988*** (0.070) |
| 65+ | −0.0695 (0.045) | 0.0190 (0.053) | −0.1228** (0.061) | 0.0763 (0.072) |
| Race (Ref: New Zealand European) | ||||
| Maori | 0.0446 (0.041) | −0.0807* (0.043) | 0.0828 (0.063) | 0.0207 (0.071) |
| Pacific Peoples | 0.1328 (0.096) | −0.1058 (0.084) | 0.0614 (0.095) | 0.0000 (.) |
| Asian | −0.0599 (0.039) | −0.1704*** (0.052) | 0.0178 (0.048) | −0.1305** (0.063) |
| Indian | −0.0969* (0.055) | −0.0908 (0.117) | 0.0118 (0.056) | −0.1542** (0.072) |
| Other | −0.0055 (0.100) | −0.1106 (0.125) | 0.0000 (.) | 0.1156 (0.129) |
| Illness preventing work for 2+ months | −0.0496 (0.044) | −0.0630 (0.052) | 0.1457*** (0.047) | 0.0261 (0.084) |
| Death of partner | −0.0636 (0.106) | 0.0283 (0.146) | 0.1960*** (0.074) | 0.0223 (0.116) |
| Job loss or redundancy leading to unemployment | 0.0694* (0.040) | −0.1030** (0.050) | −0.0233 (0.063) | 0.0249 (0.080) |
| Left work to care for family members or friends full-time | 0.0639 (0.067) | 0.1675* (0.091) | −0.0638 (0.060) | 0.0579 (0.092) |
| Observations | 852 | 852 | 428 | 437 |
| McFadden pseudo R2 | 0.0889 | 0.2323 | 0.179 | 0.2262 |
[i] Table 5 presents the subsample analysis results exploring the differential impact of mental health on long-term debt outcomes, specifically personal loans and mortgages, across two groups: individuals with parental financial guidance and those without. The analysis provides separate coefficients for each debt type, comparing the effects of poor mental health, demographic characteristics, and socio-economic factors within these subgroups.
Table 6.
Robustness Checks
| Panel A: Alternative Debt Classifications (Logit) | ||||
| Short-term Debt | Long-term Debt | |||
| Poor Mental Health | −0.0312** (0.043) | −0.1501* (0.051) | ||
| Controls | YES | YES | ||
| Observations | 1333 | 1333 | ||
| McFadden pseudo R2 | 0.1101 | 0.2035 | ||
| Panel B: Alternative Models – Excluding Age (Probit) | ||||
| BNPL | Credit Card | Personal Loan | Mortgage | |
| Poor Mental Health | −0.0132** (0.024) | −0.0582** (0.041) | −0.0612** (0.022) | −0.1051** (0.020) |
| Controls | YES | YES | YES | YES |
| Observations | 1333 | 1333 | 1333 | 1333 |
| McFadden pseudo R2 | 0.1245 | 0.1843 | 0.0784 | 0.1999 |
| Panel C: Alternative Models – Excluding Income (Probit) | ||||
| BNPL | Credit Card | Personal Loan | Mortgage | |
| Poor Mental Health | −0.0169** (0.024) | −0.1002* (0.069) | −0.0759*** (0.008) | −0.1815* (0.093) |
| Controls | YES | YES | YES | YES |
| Observations | 1333 | 1333 | 1333 | 1333 |
| McFadden pseudo R2 | 0.1244 | 0.1411 | 0.0698 | 0.1264 |
[i] Table 6 presents the robustness check results. In Panel A, we reestimate the main model using alternative debt classifications and logit. Short-term debt is defined as buy-now-pay-later or credit card debt, while long-term debt includes personal loans or mortgage debt. In Panels B and C, we reestimate the probit models by excluding age and income controls separately.