This paper complements the work of Kim and Chatterjee (2018) by examining the effect of student debt on life satisfaction for both all and retired households using longitudinal data set from the 2011-2017 U.S. Panel Study of Income Dynamics (PSID). The study estimates the random effects ordered probit model with Mundlak correction. The findings from the current study indicate that, for both all and retired households, the presence of student debt decreases the probability that households will report “very satisfied” or “completely satisfied” with life compared to households without student debt. The incidence of student debt, however, increases the probability that households will report either “not at all satisfied,” “not very satisfied,” or “somewhat satisfied.” The amount of student debt also shows similar effects on life satisfaction, although the effect is non-monotonic. Unlike the results for all households, the results for retired households are both statistically and economically significant.
