ORIGINAL RESEARCH article
Front. Public Health
Sec. Public Mental Health
Volume 13 - 2025 | doi: 10.3389/fpubh.2025.1563297
Unpacking the Role of Financial Literacy in the Debt-Mental Health Nexus: Evidence from China
Provisionally accepted
- Ankang University, Ankang, China
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Studies investigating the factors potentially influencing the relationship between household debt and psychological issues have not received significant attention in the literature, despite the growing challenges associated with debt. This study aims to expand this area of research by leveraging data from the China Family Panel Studies (CFPS) 2014 wave, a nationally representative dataset from China, to explore how financial literacy interacts with the negative correlation between household indebtedness and mental health. Our findings suggest that financial literacy may serve two roles in the debt-mental health nexus. First, higher financial literacy may enhance mental health by contributing to lower levels of household indebtedness. Second, financial literacy may act as a moderating variable in the relationship between household indebtedness and mental health. Our analysis further reveals that basic financial literacy is a crucial factor in elucidating these relationships across various model specifications, particularly regarding non-housing debt as opposed to housing debt.
Keywords: household indebtedness, Mental Health, financial literacy, Non-housing debt, China
Received: 19 Jan 2025; Accepted: 17 Apr 2025.
Copyright: © 2025 Cai. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Yunchao Cai, Ankang University, Ankang, China
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