Abstract
Recently, the continuous rise in household debt levels has put increasing pressure on China’s households, and the divorce rate has been increasing simultaneously. Therefore, how does household debt influence an individual’s decision to divorce? Using empirical data from the China Family Panel Studies from 2010 to 2018, this study examines the influence of household debt on the decision to divorce from a micro perspective. Our findings reveal the following: (1) the level of household debt significantly impacts the divorce rate, and the estimation results still hold after a series of robustness tests; (2) heterogeneity analysis reveals that non-housing debt, as a component of household debt, is more sensitive to individual divorce behavior, whereas housing debt has no significant effect. Moreover, the analysis of different sample groups shows that household debt positively impacts the divorce rate of middle-income groups, individuals with high levels of substance craving, and those living in eastern China; (3) additional research indicates that household debt affects an individual’s mental status, changes their marital status, and increases the probability of household divorce. This study’s findings have provided new evidence for understanding theories about household debt and marital behavior and references for the government to develop relevant policies.
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Source: National Bureau of Statistics, Ministry of Civil Affairs
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Data availability
All data generated or analyzed during this study can be obtained from the China Social Science Survey Center, Peking University (ISSS) upon request.
Notes
Outstanding housing loans, borrowing for home purchase or renovation, outstanding other loans, outstanding friends and relatives, and private borrowings all contribute to total household debt. This study classifies pending home loans and borrowings for home purchase or improvement as housing liabilities. Meanwhile, pending other loans, borrowings from friends and relatives, and private borrowings are classified as non-housing liabilities.
The CFPS questionnaire presents the following question about respondents' self-assessed economic status: “Which level does your personal income belong to locally?” The respondents can rate their response from 1 to 5, with 1 being the lowest and 5 being the highest. We can calculate information about the individual's self-assessed economic status based on this question. Simultaneously, the family's actual economic status in the country where they reside is calculated on the basis of their actual income. Specifically, within a county, we sorted all of the samples by income, from low to high, and then divided them into 10 groups, each assigned a number from 1 to 10.
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Acknowledgements
We would like to thank the Editor-in-Chief Joyce Serido and referees for reviewing our article. We also would like to thank Professor Charles Yuji Horioka of Kobe University for leading his expertise on household assets and valuable suggestions.
Funding
(1) National Natural Science Foundation of China (NSFC) project “Study on Household Debt Behavior and the Impact on Economic Inequality in the Context of Common Wealth”., 72203136. (2) Japan Society for the Promotion of Science (JSPS) KAKENHI Grant Number JP23K01453.
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Guo, Y., Zhang, C. & Tang, C. Does Debt Affect Divorce? Evidence from China. J Fam Econ Iss (2024). https://doi.org/10.1007/s10834-024-09952-0
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DOI: https://doi.org/10.1007/s10834-024-09952-0