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The Probability of Being Credit-Constrained Households and Labor-Income Risk (in Korean)

Author

Listed:
  • Jinsuk Choi

    (Department of Economics, Pusan National University)

  • Youngduk Kim

    (Department of Economics, Pusan National University)

Abstract

In this paper, we empirically examine how labor-income risk affects the probability of being credit-constrained households using Household Consumption Survey Data(HCSD) released from Korea National Statistical Office in 2000. This survey is conducted every five years, and the sample is about twenty three thousand Korea households. Because the credit-constrained households are not directly observable in our cross section data, we indirectly identify them by debt structure of households. The identified credit- constrained households are at about 38.6 percent of the Korea population. According to the estimated results, the probability of being credit-constrained households is determined not only by current income, wealth, age and debt level, but also by labor-income risk. Furthermore, the probability of being liquidity constrained is an increasing function of labor-income risk.

Suggested Citation

  • Jinsuk Choi & Youngduk Kim, 2007. "The Probability of Being Credit-Constrained Households and Labor-Income Risk (in Korean)," Economic Analysis (Quarterly), Economic Research Institute, Bank of Korea, vol. 13(4), pages 64-86, December.
    • Handle: RePEc:bok:journl:v:13:y:2007:i:4:p:64-86
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    More about this item

    Keywords

    Credit Rationing; Labor-Income Risk; Precautionary Savings; Logit Regression;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • G0 - Financial Economics - - General
    • J1 - Labor and Demographic Economics - - Demographic Economics

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