Abstract:

This paper examines the influence of social interaction on household debt with using the data from the Survey of Health, Ageing and Retirement in Europe. I investigate whether sociability (participation in social activities like charity work, sport club and educational course) is related with the tendency of holding debt and the amount of debt held. For my total sample consisting of thirteen European countries, I find that sociability has sizeable positive effects on both mortgage debt and non-mortgage debt. It shows that sociable households are more likely to borrow and have greater amounts conditional on borrowing compared to the others. Nevertheless, my country-level findings present a considerable variation across countries in their social effects on debt.   Keywords: Household Finance, Social Interaction, Household Debt, European Debt Crisis

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