Intergenerational Influences on Personal Bankruptcy: Evidence from Singapore

35 Pages Posted: 4 Apr 2022

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate

Xiaoyu Zhang

Central University of Finance and Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 9, 2022

Abstract

Singapore has one of the strictest debt relief systems worldwide. We merge a large dataset on the residences of adult Singaporean citizens with a bankruptcy dataset to investigate the effect of parental bankruptcy on children’s financial behavior in adulthood. Children whose parents declared bankruptcy during their childhood years (before 17 years of age) are 2-8 percentage points less likely to declare bankruptcy than their older siblings who were over 18 years old during the bankruptcy event. These results contribute to the debate on the leniency of debt relief policies by revealing that strict bankruptcy laws have persistent, potentially intergenerational, effects.

Keywords: Intergenerational Effects, Personal Bankruptcy, Debt Relief Policy

JEL Classification: K35, G51, D10, D18

Suggested Citation

Agarwal, Sumit and Sing, Tien Foo and zhang, xiaoyu, Intergenerational Influences on Personal Bankruptcy: Evidence from Singapore (March 9, 2022). Available at SSRN: https://ssrn.com/abstract=4053904 or http://dx.doi.org/10.2139/ssrn.4053904

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Tien Foo Sing (Contact Author)

National University of Singapore (NUS) - Department of Real Estate ( email )

4 Architecture Drive
Singapore 117566
Singapore

Xiaoyu Zhang

Central University of Finance and Economics ( email )

770 Middle Road
Dresden, ME 04342
United States

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