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Household Debt and Marital Instability: Evidence from the Korean Labor and Income Panel Study

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  • Yunhee Chang

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  • Ki Lee

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Abstract

Korean society has recently experienced rapid increases in household debt and divorce rates. This study investigates whether household debt and debt ratios lower marital stability and increase the probability of divorce among Korean families. Six-year panels from the Korean Labor and Income Panel Study (KLIPS) household surveys were used for analysis. The effect of household debt upon the probability of divorce was estimated through pooled and population-averaged Logit models. The results suggest that household financial strain measured by the amount of household debt and the debt-to-income ratios does not significantly affect the probability of divorce. This finding contradicts the widespread notion that households’ excessive borrowing has been partially responsible for the recent increase in divorce rates in Korea. Copyright Springer Science+Business Media, Inc. 2006

Suggested Citation

  • Yunhee Chang & Ki Lee, 2006. "Household Debt and Marital Instability: Evidence from the Korean Labor and Income Panel Study," Journal of Family and Economic Issues, Springer, vol. 27(4), pages 675-691, December.
  • Handle: RePEc:kap:jfamec:v:27:y:2006:i:4:p:675-691
    DOI: 10.1007/s10834-006-9039-2
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    File URL: http://hdl.handle.net/10.1007/s10834-006-9039-2
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    References listed on IDEAS

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    1. Luis Cubeddu & Jose-Victor Rios-Rull, 1997. "Marital risk and capital accumulation," Staff Report 235, Federal Reserve Bank of Minneapolis.
    2. Weiss, Yoram, 1993. "The formation and dissolution of families: Why marry? Who marries whom? And what happens upon divorce," Handbook of Population and Family Economics,in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 3, pages 81-123 Elsevier.
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    8. Gianni La Cava & John Simon, 2003. "A Tale of Two Surveys: Household Debt and Financial Constraints in Australia," RBA Research Discussion Papers rdp2003-08, Reserve Bank of Australia.
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    11. Jonathan Fisher & Angela Lyons, 2006. "Till Debt do us Part: A Model of Divorce and Personal Bankruptcy," Review of Economics of the Household, Springer, vol. 4(1), pages 35-52, March.
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    Cited by:

    1. Aydogan Ulker, 2009. "Wealth Holdings and Portfolio Allocation of the Elderly: The Role of Marital History," Journal of Family and Economic Issues, Springer, vol. 30(1), pages 90-108, March.
    2. Deborah Thorne, 2010. "Extreme Financial Strain: Emergent Chores, Gender Inequality and Emotional Distress," Journal of Family and Economic Issues, Springer, vol. 31(2), pages 185-197, June.
    3. Jeffrey Dew, 2011. "The Association Between Consumer Debt and the Likelihood of Divorce," Journal of Family and Economic Issues, Springer, vol. 32(4), pages 554-565, December.

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