Race, Religion, and Household Debt

Low consumer debt levels are a natural consequence of an inability to pay consumer debt, not a consequence of religiously or culturally driven thrift.

Religion has been shown to have both a direct and indirect role in shaping personal values, especially pertaining to money and wealth accumulation. Existing research establishes a strong relationship between religious affiliation and wealth attainment. However, previous scholarship has largely ignored the link between religious affiliation and debt, an important yet overlooked indicator of total net worth. 

To address this gap, we utilize data from the 2017 wave of the Panel Study of Income Dynamics (PSID) and examine how religious affiliation is associated with two forms of household debt: credit card and mortgage debt. Findings from a series of logistic regression models indicate that Black Protestants have the lowest rates of both credit card and mortgage debt and Hispanic/Latinx Catholics have comparably low rates of credit card debt relative to Conservative Protestants. KHB decomposition analyses reveal that race/ethnicity explain some of the relationship between a Black Protestant or Hispanic/Latinx Catholic religious affiliation and household debt. 

While our study is the first to document the link between religious affiliation and debt profiles of Americans, we would encourage future research to explore how other elements of religiosity—long acknowledged by sociologists to affect wealth and social status—influence different types of debt accumulation in nuanced and meaningful ways.

Tristen Clifton, Mackenzie Brewer, Laura Upenieks, "Religious affiliation and debt among U.S. households" 115 Social Science Research 102911 (September 2023). The sample studied was as follows:

Approximately 30% of respondents report having no religious affiliation. Over a quarter of the sample is Catholic, with White Catholics comprising about 12% of the sample and Hispanic/Latinx Catholics making up 13%. Conservative Protestants make up about 10% of the sample, Black Protestants another 6%, and mainline Protestants also 6%. The remaining 23% of the sample is made up of other Christian denominations or . . .

An alternative explanation is that bad credit ratings and low incomes, rather than a religious and culturally driven aversion to debt, drives the low levels of household debt in these ethnic/religious communities. This tends to be supported by the review of the literature which notes that: 

Previous work revels large inequalities in wealth accumulation among religious groups (Keister 2003, 2008), with conservative Protestants estimated to have the lowest levels of wealth accumulation over the life course and Jewish and Catholic Americans to have the highest levels of wealth (Keister 2012).

It would have been less interesting to write a paper that said that people with less income, less wealth, and less good credit tend to have less credit card and mortgage debt. But most of the effect of religion on consumer debt levels is mediated through the effect of race (the conclusion of the paper above notes that: "We found that race explains much of these relationships[.]"), and almost all of the effect on consumer credit due to both race and religion is mediated by income, wealth, and credit ratings.