The Social Costs of Debt Problems
Recent research, conducted by Panteia in collaboration with Utrecht University of Applied Sciences and Nibud, has revealed the considerable social costs of debt problems. The report, entitled: De maatschappelijke kosten van schuldenproblematiek. Een last voor burgers, bedrijven en overheden (The Social Costs of Debt Problems: A Burden for Citizens, Businesses and Governments), shows that the annual costs of problematic debt in The Netherlands amount to at least €8.5 billion. These costs are spread across various domains such as health, social support, labour market and economy, education, and public order and safety. Many cost categories could not be quantified.
One of the key findings is that more than half of these costs, approximately €4.5 billion, stem from reduced labour productivity and absenteeism, which are primarily borne by employers. In healthcare, the costs related to GP visits, mental health care and suicide are estimated at €438 million. There is no quantitative insight into debt-related costs of medication use and curative care, although these are expected to be significant. Social support, including debt counselling, protective administration and homelessness, costs €1 billion annually. While the exact costs in education are difficult to quantify, it is clear that debt problems lead to reduced academic performance and school drop-out, which in turn cause economic damage.
The report highlights that a significant share of these costs can be prevented through preventive measures and timely solutions for debt. However, addressing the underlying causes of debt remains crucial for a sustainable solution. Debt is often part of a complex network of problems, including mental health issues and social tensions. Therefore, resolving debt problems does not automatically mean that all related costs will disappear.
This research underlines the urgent need for policy interventions to effectively tackle debt problems. The insights from the report can contribute to a better understanding of the scale and complexity of the issue, and the need for targeted investments and measures.
The Interdepartementaal Beleidsonderzoek (Interdepartmental Policy Review, IBO) has used Panteia’s report as a key input for its own study on policy options for addressing debt problems. The IBO working group used these findings to develop policy options aimed at preventing problem debt, identifying and resolving it more quickly, and improving the effectiveness of debt assistance. Panteia’s report served as an important basis for these policy developments, enabling the IBO working group to make recommendations for a more effective approach to debt problems in the Netherlands.
Download the full report (in Dutch) here.
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