Financial strain in Norway: the lifetime risk of and expected time spent in payment problems

While some 10% of adults in Europe report having payment problems, that is, not being able to meet their financial commitments over a prolonged period, how many people experience payment problems at some point in their lives, and how long these payment problems last, remain unknown. We investigated the determinants of the lifetime risks and expectancies of payment problems in Norway, the country with the highest household debt burden among the OECD countries. We derived geographic, demographic, socio-economic, and health variables from national registers and data on monthly payment problems from the national debt collection agency for the 2015-2019 period. We analysed these data in a discrete multistate modelling framework, and calculated the lifetime risk of experiencing payment problems, the expected time spent in payment problems, and total life expectancy. These metrics were calculated for synthetic cohorts who experienced the current risk of payment problems and mortality throughout their life course. Some 39% of the cohort members experienced payment problems at least once during their life course, with the share being higher among men. The life expectancy with payment problems at age 18 was 2.1 years, which corresponded to 3% of the total life expectancy. Across subgroups defined by the intersections of low education, sex, record of psychiatric diagnosis, and area-level income, the longer the payment problem expectancy these groups had, the shorter their total life expectancy was. These findings demonstrate that payment problems are often chronic, and have the same upstream determinants as early mortality.