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

  • Yunhee Chang


  • Ki Lee


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    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

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    Article provided by Springer in its journal Journal of Family and Economic Issues.

    Volume (Year): 27 (2006)
    Issue (Month): 4 (December)
    Pages: 675-691

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    Handle: RePEc:kap:jfamec:v:27:y:2006:i:4:p:675-691
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    8. Luis Cubeddu & Jose-Victor Rios-Rull, 1997. "Marital risk and capital accumulation," Staff Report 235, Federal Reserve Bank of Minneapolis.
    9. 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.
    10. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-87, December.
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