Financial debts and subjective well-being of young adults: An adaption of the stress process model

Using a stress process theoretical framework, this article examines the relationship between financial debts and the subjective well-being of young adults and the role of social and personal resources in the mechanism. The analyses include 2348 young adults from the 2017 Transition into Adulthood Supplement study of Panel Study of Income Dynamics, using the structural equation modeling method. We found that when faced with student loans as a stress exposure, young adults' social resources (financial support and social participation) and personal psychological resources (self-esteem) may act in different ways explaining life satisfaction and subjective well-being. Having student loans increased the likelihood of receiving financial support from family and social activity participation, while also boosting one's self-esteem. However, financial support as a social resource was negatively associated with young adults' life satisfaction and subjective well-being, whereas self-esteem as a personal resource was positively associated with life satisfaction and subjective well-being. Our study suggests that exploring the underlying mechanism of the association between debts and subjective well-being is necessary and crucial because the mediating roles of social and personal resources were important in determining young adults' subjective well-being. Further research should explore this topic, as recent young adults are more exposed to debt burdens than preceding cohorts.