The Great Recession and rising household and consumer debt has led to a great deal of scholarly and popular concern about the relationship between debt and well-being. To date, much of the research on this topic has hypothesized that debt is a stigmatizing financial stressor that can undermine individual and family physical and mental health. Less research has considered whether and how health problems influence indebtedness across the life course. Health problems—particularly debilitating and chronic health problems such as disability—can lead to lost wages and excess medical expenses which could in turn increase the need for credit and increase the risk of overindebtedness. This is particularly true in the context of a limited social safety net. However, little is known about the relationship between disability and consumer indebtedness. And, the little work that has explored the causal effect of health on indebtedness is limited, insofar that health is endogenous, and that a range of omitted variables may both influence health and indebtedness.

To address these gaps in the literature, I use nationally representative, longitudinal data from the National Longitudinal Study of Youth 1979-cohort (NLSY-79) and the Children of the NLSY-79 (CNLSY-79) and hierarchical growth curve models to examine the effects of having a child with a disability on trajectories of consumer debt across the adult life course. I hypothesize that having a child with disability increases risk for accumulating consumer debt, and that parents with a child with a disability will have a greater risk for being chronically overindebted across the life course. I will conduct several analyses to strengthen causal claims and examine heterogeneity in effects. First, I will focus on variation across types of child disability, paying close attention to childhood disabilities and health conditions that are widely considered by the medical community to be random—and thus not a product of parents’ behavior or history. These include conditions such as Down syndrome, congenital heart malformations, microcephalus, and renal agenesis (Curtis et al. 2010). If such random health conditions are associated with parental indebtedness, it would increase confidence in a causal effect. Second, I will account for a range of potential confounders that may be associated with child health and debt, including parental age at birth of the child, parental health problems and disability status, and sociodemographic information. In addition, to ensure that the findings are consistent across debt measures, I will use several measures of debt, including the amount of consumer debt, ratio of consumer debt-to-income, and the ratio of consumer debt-to-assets across the adult life course. Third, I will test for heterogeneity by family structure, race, and socioeconomic status, with the goal of elucidating how the effects of having a child with a disability on consumer debt may or may not be exacerbated by social disadvantage. The results of this study will be informative for understanding the relative strength of the social safety net among parents of children with disabilities, as well as the causes and correlates of rising consumer debt in the U.S.