Work Disability, Mortgage Default, and Life Satisfaction in the Economic Downturn: Evidence from the Panel Study of Income Dynamics

The study examined the relationship between work disability and mortgage default in the latest economic downturn in the United States and further assessed the associations of work disability and mortgage default with life satisfaction. Work disability was measured by self-reported health-related work limitations. Mortgage default was defined as delaying home mortgage payment for more than 30 days in the study. The data were obtained from the 2007 and 2009 Panel Study of Income Dynamics, and logistic regression was used to test research questions. Of the 2,361 homeowners who had a mortgage, nearly 6% had mortgage default in 2009, and 14.5% of householders or their spouses had work disabilities in 2007. The disability group was significantly more likely than the non-disability group to have mortgage default, AOR = 1.80, 95% CI = (1.02, 3.16). Both work disability and mortgage default had significant and negative associations with life satisfaction. Results suggest that mortgage assistance services should be provided for individuals with work disabilities and their families to prevent housing distress and improve quality of life.