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Effects of Family Life-Cycle Stages on Consumer Debts

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Abstract

Using the 1998 Survey of Consumer Finances (SCF), this study examined factors related to two types of consumer debt: installment debt and credit card debt. To address the limitations of the conventional life-cycle hypothesis, the study incorporated ability, willingness, and need to borrow, and prudence as well as life-cycle stages in the conceptual framework. The results of the double-hurdle model showed that life-cycle stages, willingness and ability to borrow, prudence, and the need to borrow were significant factors affecting installment debt and credit card debt. Based on the results, implications for financial counselors and educators, lenders, consumers, and policy makers are discussed.

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Authors and Affiliations

  1. Sungkyunkwan University, 3-53, Myongyun-Dong, Chongro-Gu, Seoul, Korea, 110-745

    Eunyoung Baek

  2. Ohio State University, 262 Campbell Hall, 1787 Neil Avenue, Columbus, OH, 43210, USA

    Gong-Soog Hong

Authors
  1. Eunyoung Baek
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  2. Gong-Soog Hong
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Baek, E., Hong, GS. Effects of Family Life-Cycle Stages on Consumer Debts. Journal of Family and Economic Issues 25, 359–385 (2004). https://doi.org/10.1023/B:JEEI.0000039946.59422.5f

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  • DOI: https://doi.org/10.1023/B:JEEI.0000039946.59422.5f

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