Determinants of Household Debt: A Systematic Review of the Literature

Cloudio Kumbirai Chikeya () and Lungile Ntsalaze
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Cloudio Kumbirai Chikeya: Johannesburg Business School, University of Johannesburg, Johannesburg 2092, South Africa
Lungile Ntsalaze: College for Business & Economics, University of Johannesburg, Johannesburg 2092, South Africa

Economies, 2025, vol. 13, issue 3, 1-36

Abstract: Household debt plays a crucial role in influencing the performance of the economy and its vulnerability to shocks. This study synthesises studies on this topic. We used the systematic literature review technique to analyse 97 studies from the EBSCO, Google Scholars, Sabinet African Journals, SAGE, ScienceDirect, Scopus, Springer Link, Taylor and Francis, and Web of Science databases from 2004 to 2024. The results reveal that country-level and household-specific factors are important in explaining debt. We delineate supply-side and demand factors that drive debt. Country-level factors that explain indebtedness include housing prices, unemployment, economic growth, interest rates, inflation, and income levels. At the household level, factors such as education level, behaviour, social status, employment, house prices, income, family size, occupation, wealth, and marital status explain indebtedness. Policies impact loan types differently; therefore, due consideration should be taken and prescriptions should aim to address both supply and demand factors. Future studies should rely on AI-driven methods and techniques that utilise natural language processing capabilities such as sentiment analysis in order to handle large data sets and ensure objectivity.

Keywords: household; indebtedness; systematic literature review; house prices; interest rates; family size (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2025
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