A study examining the psychological welfare of 196 chronically indebted, low-income individuals in Singapore found that 3 months after paying off debt with help from a charity the individuals made better financial decisions and experienced decreased anxiety and increased cognitive function; using debt relief to reduce the total number of debts was more effective than allocating relief to partially reduce all debts, suggesting that the effects of debt are both financial and psychological.
###
Article #18-10901: "Reducing debt improves psychological functioning and changes decision-making in the poor," by Qiyan Ong, Walter Theseira, and Irene Y.H. Ng.
MEDIA CONTACT: Qiyan Ong, National University of Singapore, SINGAPORE; email: < qyong@nus.edu.sg >, < qiyanong@gmail.com >; Walter Theseira, Singapore University Of Social Sciences, SINGAPORE; tel: +65-98680453; email: < walter.theseira@gmail.com > < waltertheseira@suss.edu.sg >
Proceedings of the National Academy of Sciences