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Debt Holding and Burden by Family Structure in 1989-2007

Networks Financial Institute Working Paper 2011-WP-04

30 Pages Posted: 31 Mar 2011  

Jing Jian Xiao

University of Rhode Island

Rui Yao

University of Missouri at Columbia - Department of Personal Finance Planning

Date Written: March 1, 2011

Abstract

Financial deregulation starting in the 1980s provided families both economic opportunities and risks. Rapidly increased mortgage, credit card and other debts are out of control among many families, which arguably caused the recent great recession. The purpose of this study is to describe patterns and trends of debts held by American families through analyzing data from 1989-2007 Surveys of Consumer Finances. Eight family structure types were formed in terms of marital status, gender, and child status. Holding patterns and trends of five types of debts (mortgage, credit card, vehicle, education, and purchase loan) and three debt burden measures were examined. For all family types, the holding rate of credit card debt increased but that of the purchase loan decreased in the last two decades. Compared with the average, married with children families were more likely to hold mortgage, credit card, and vehicle loans. In terms of debt burdens, married with children families had the highest debt payment to income ratio, cohabiting couples with children and single females with children had the highest rate of heavy debt to income ratio (over 40%) and of debt delinquency.

Keywords: Debt holding, debt trend, debt type, family structure, Survey of Consumer Finance

Suggested Citation

Xiao, Jing Jian and Yao, Rui, Debt Holding and Burden by Family Structure in 1989-2007 (March 1, 2011). Networks Financial Institute Working Paper 2011-WP-04. Available at SSRN: https://ssrn.com/abstract=1799362 or http://dx.doi.org/10.2139/ssrn.1799362

Jing Jian Xiao (Contact Author)

University of Rhode Island ( email )

Transition Center
Kingston, RI 02881
United States
401-874-2547 (Phone)
401-874-4020 (Fax)

HOME PAGE: http://www.uri.edu/hss/hdf/faculty/JingJXiao.htm

Rui Yao

University of Missouri at Columbia - Department of Personal Finance Planning ( email )

239 Stanley Hall
Columbia, MO 65211-7700
United States
573-882-9343 (Phone)
573-884-8389 (Fax)

HOME PAGE: http://pfp.missouri.edu/faculty_yao.html

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