Household debt continues to increase. Among those who fail to pay their debt, there is often a history of ill health. But do we get sick from being in debt, or do debts grow among those who are already sick? Would it be more beneficial, from a perspective of public finances, to work proactively against ill health rather than combatting debt itself?
For those who manage to pay their bills every month, being in debt is not a problem – it can be a way of fulfilling dreams of studies and living that would otherwise not have been possible. At the School of Economics and Management, researchers work together with the Swedish Enforcement Authority to find patterns among people in debt who fall behind, and how to best assist them. The question is whether it requires tougher regulations of the credit market.
Figuring out where the downward spiral begins
“Perhaps it’s more about taking action at a very early stage in cases of, for instance, depression. From a policy perspective, there is a huge difference: Are we to limit people’s ability to borrow money, or try to improve people’s health? We want to figure out where the downward spiral begins”, says Therese Nilsson.
“If we turn it around: Does income make us feel good, or is it when we feel good that we are able to generate income?”
“By taking a loan, you can invest in things which may be beneficial to you in the future, such as housing and education. As long as you know that you will be making money during your lifetime, it’s not likely to become a problem.”
Analysing the use of healthcare for dementia
At the same time, the proportion of older people is increasing in Sweden and in large parts of the world. The healthcare costs for dementia care are expected to increase dramatically. The School of Economics and Management is working together with the Faculty of Medicine at Lund University to figure out how healthcare can become as cost-effective as possible.
“We will analyse patients’ use of healthcare, drug intake and what assistance they receive from the municipality, as well as the situation for their loved ones”, says Professor of Health Economics Ulf Gerdtham.