Household Debt and Delinquency Over the Life Cycle

Asian Development Review 37:1, 2020

32 Pages Posted: 10 Apr 2020

See all articles by Sommarat Chantarat

Sommarat Chantarat

Bank of Thailand

Atchana Lamsam

Bank of Thailand

Krislert Samphantharak

University of California, San Diego - School of Global Policy and Strategy

Bhumjai Tangsawasdirat

Bank of Thailand

Date Written: March 16, 2020

Abstract

This paper uses loan-level data from Thailand’s National Credit Bureau to study household debt over the life cycle of borrowers. We decompose two aggregate and commonly used measures of debt — debt per capita and delinquency rate — into components that unveil the extensive and intensive margins of household indebtedness. We find a striking inverted-U life-cycle pattern of indebtedness as predicted by economic theories. However, peaks are reached at different ages for different loan products and different lenders. We also find that debt has expanded over time for all age groups. Younger cohorts seem to originate debt earlier in their lives than older generations. Meanwhile, older borrowers remain indebted well past their retirement age. Finally, we find a downward pattern of delinquency over the life cycle. Our findings have important policy implications on financial access and distress of households as well as on economic development and financial stability of the economy.

Keywords: Delinquency, Demography, Financial Development, Household Debt, Life Cycle

JEL Classification: D14, D30, G20, J26, O16

Suggested Citation

Chantarat, Sommarat and Lamsam, Atchana and Samphantharak, Krislert and Tangsawasdirat, Bhumjai, Household Debt and Delinquency Over the Life Cycle (March 16, 2020). Asian Development Review 37:1, 2020, Available at SSRN: https://ssrn.com/abstract=3555403

Sommarat Chantarat

Bank of Thailand ( email )

273 Samsen Road
Bangkhunprom, Bangkok 10200
United States

Atchana Lamsam

Bank of Thailand ( email )

273 Samsen Road
Bangkhunprom, Bangkok 10200
United States

Krislert Samphantharak (Contact Author)

University of California, San Diego - School of Global Policy and Strategy ( email )

9500 Gilman Drive
La Jolla, CA 92093-0519
United States
858-534-3939 (Fax)

Bhumjai Tangsawasdirat

Bank of Thailand ( email )

273 Samsen Road
Bangkhunprom, Bangkok 10200
United States

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