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Whitepaper: Reducing debt improves psychological functioning and changes decision-making in the poor

Peer-reviewed multidisciplinary US science journal, PNAS, has released an open-paper, exploring at the extent to which reductions in employee debt can help them make better decisions.

Reducing debt improves psychological functioning and changes decision-making in the poor 1

The authors argue that paying off debt improves cognitive functioning by about one-quarter, and reduces the likelihood of exhibiting anxiety by 11%.

Amongst its conclusions is that employers should:

  • Examine the relative cost- effectiveness of targeting the psychological, vs. economic, costs of debt