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Debt, Financial Vulnerability and Repayment Behaviour in Older Canadian Households

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  • Jie Zhou

Abstract

Earlier research has documented that debt at older ages has increased significantly in Canada over the period from 1999 to 2016. In this article, we explore the consequences of a growing proportion of older Canadian households experiencing financial vulnerability. After controlling for household characteristics, we find among older households that a high debt-to-asset ratio and very low liquid wealth are significantly and positively associated with skipping or delaying a mortgage or non-mortgage debt payment and with usually paying the minimum amount or less on credit cards in the previous year. The debt-to-income ratio, however, is not an important indicator of financial vulnerability for older households.

Suggested Citation

  • Jie Zhou, 2021. "Debt, Financial Vulnerability and Repayment Behaviour in Older Canadian Households," Departmental Working Papers 2021-01, The University of Winnipeg, Department of Economics.
    • Handle: RePEc:win:winwop:2021-01
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    References listed on IDEAS

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    1. Lusardi, Annamaria & Tufano, Peter, 2015. "Debt literacy, financial experiences, and overindebtedness," Journal of Pension Economics and Finance, Cambridge University Press, vol. 14(4), pages 332-368, October.
    2. Nicolas Bédard & Pierre-Carl Michaud, 2021. "Playing with Fire? Household Debt near Retirement in Canada," Canadian Public Policy, University of Toronto Press, vol. 47(1), pages 56-71, March.
    3. Ari Hyytinen & Hanna Putkuri, 2018. "Household Optimism and Overborrowing," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(1), pages 55-76, February.
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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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