The Weight of Debt: Relationships of Debt with Employee Experiences

Connections of workers’ financial situations with their well-being and work-related attitudes have received limited attention in organizational psychology research. Furthermore, the potential impacts of personal debt on workers’ work-related outcomes remain largely unexamined. In two studies, we examined relationships between debt, financial strain, work-family conflicts, and work-related attitudes. Debt was assessed in terms of amount (i.e., monthly amount paid to debt in Study 1; total amount of debt owed in Study 2) and complexity, assessed as the number of sources of debt. In Study 1, 458 workers recruited through Amazon’s Mechanical Turk responded to a survey regarding their financial situation at Time 1 and measures of well-being and work-related attitudes at Time 2 (2 months later). Debt complexity and monthly amount were both positively associated with financial strain and exhibited indirect relationships with several job attitudes and conflict between work and family via financial strain. Complexity exhibited stronger relationships than amount. Study 2 used publicly available data from the Health and Retirement Study to test similar relationships among a working sample over three time points, each separated by 2 years. Total debt amount and debt complexity were positively related to financial strain, but only debt amount exhibited indirect relationships with job-related attitudes and work-family conflict via financial strain. These results suggest that personal debt is meaningful to consider in organizational research, given the potential indirect relationships with outcomes of interest to organizations. Implications of the findings for practical interventions and future directions for research are discussed.