Mortgages, household economic resilience and health

The connection between our financial situation and health is a well-established idea in health economics and demographic research. Understanding how income, debt and wealth impact health is essential for designing effective public policies that promote social unity, equity, and fairness across communities. Many people view homeownership as a lifelong goal and research has consistently shown that owning a homea form of wealthcan lead to improved long-term health. However, buying a home often involves taking on a mortgage, which can create financial stress and make families more vulnerable to job losses and other economic challenges. While having wealth can help protect against financial difficulties, being in debt can create stress that negatively affects mental health and well-being. Dr. Michael Berger, during his Erwin-Schrödinger-fellowship, will investigate how financial pressures from home mortgages might counteract the health benefits of homeownership. His research will focus on the period immediately following home purchases, where financial obligations from mortgages may increase the vulnerability of households to job loss. What makes this study unique is the use of advanced analytical methods on comprehensive data that includes everyone in the population of Finland. By examining these dynamics, his work aims to inform public policies on mortgages and housing security, especially for economically disadvantaged groups who may tacitly accept not just a financial, but also a health risk, when pursuing mortgage-financed homeownership. Currently a Post Doc Researcher at the Medical University of Vienna and Post Doc Fellow at the Institute for Advanced Studies in Vienna, Dr. Bergers research areas are health economics, health policy and health inequality. His work focuses on the institutional causes behind disparities in health and healthcare utilisation and their implications for the financial sustainability and equity of healthcare systems. He will spend 12 months at the Max Planck University of Helsinki Center for Social Inequalities in Population Health (MaxHel), leveraging extensive data on household debt, employment, homeownership, and health from the Finnish population. Collaborating with Prof. Pekka Martikainen, a leader in health inequalities research and director of the MaxHel, Dr. Berger aims to deepen the understanding of the connection between wealth and health.

The link between financial status and health is well-documented in health economics and demographic research. Understanding how income, debt, and wealth impact health is essential for creating policies that promote social equity and fairness across communities. Homeownership often is a life goal and has been shown improve long-term health. However, housing purchases usually require taking on a mortgage, which leads to financial stress and increases vulnerability to job loss and other economic challenges. While wealth protects against financial difficulties, debt-related stress can harm mental health and well-being. In this project, Dr Michael Berger collaborated during a 12-month research stay at the Max Planck University of Helsinki Center for Social Inequalities in Population Health (MaxHel) with Prof Pekka Martikainen and colleagues to examine how financial pressures from home mortgages offset the health benefits of homeownership. Specifically, they looked at what it means for new homeowners' mental health when they lose their job while having to repay a mortgage that they took on at most three years before. Their study builds on comprehensive data from 2001 to 2019 of the entire Finnish population. What makes this dataset unique is that it links information on homeownership and mortgages to other domains of life, such as employment, marital status and health. Dr Berger and colleagues used this information to retrace the development of severe adverse mental health events, such as hospital contacts or suicides, of new homeowners before and after job loss. The developments were then compared with those of other homeowners without a recent mortgage and of tenants who rent their apartments, using advanced analytical methods. They corroborate their results with the alternative measure of mental health-related prescription medication purchases, which capture a broader range of less severe conditions that do not result in hospital contacts. The results show that mortgage repayment obligations amplify the mental health impact of job loss. Severe mental health events and prescription medication purchases increase sharply among new homeowners who lose their job, even before the job loss occurs. In general, new homeowners and tenants react more strongly than homeowners without recent mortgages. However, after the initial spike, even those with recent mortgages experience fewer severe mental health events or prescription medication purchases than tenants. The findings have direct implications for economic equality, as Dr Berger and colleagues show that economically disadvantaged groups tacitly accept not just a financial, but also a health risk, when pursuing mortgage-financed homeownership. But even so, they are typically in a better position than people who cannot afford homeownership in the first place.