Consumer Debt Delinquency Over Life Cycle Stages

Abstract

Consumer debt delinquency, as measured by being 60 or more days late in debt payment, is an indicator of financial ill health. Using six datasets of the 1992-2007 U.S. Surveys of Consumer Finances, this study examines consumer debt delinquency over life cycle stages. Inspired by previous research (Du & Kamakura, 2006), fifteen life cycle stages are defined by household head’s age, marital status, and presence and age of children. Multivariate logistic results show that young couples and young singles with children aged 7 or older and middle aged singles with children aged 15 or older are found to have the highest risk of debt delinquency. Findings suggest that presence and age of children are important factors affecting consumer debt delinquency, which should be considered in public policies that aim to improve consumer financial well-being.

Keywords: Consumer debt, debt delinquency, life cycle behavior, Survey of Consumer Finance