This study aims to examine the effects of student loan debt on the decisions of U.S. married households to invest in stocks located in non-retirement accounts. Using longitudinal datasets from the 2011 to 2017 U.S. Panel Study of Income Dynamics and a fixed effects logit model, the results show mixed findings. The presence of student debt decreases the probability that married households will own stocks, but the amount of student debt does not show a statistically significant effect. The findings suggest that the incidence of student debt raises the perception of liquidity constraints and debt burden among married households.
Korankye, T. Student loan debt and U.S. married households’ stock investment decisions. Economic Analysis Letters, 2023, 2, 37. https://doi.org/10.58567/eal02040003
Korankye T. Student loan debt and U.S. married households’ stock investment decisions. Economic Analysis Letters; 2023, 2(4):37. https://doi.org/10.58567/eal02040003
Korankye, Thomas 2023. "Student loan debt and U.S. married households’ stock investment decisions" Economic Analysis Letters 2, no.4: 37. https://doi.org/10.58567/eal02040003
Korankye, T. (2023). Student loan debt and U.S. married households’ stock investment decisions. Economic Analysis Letters, 2(4), 37. https://doi.org/10.58567/eal02040003
Article Access Statistics
Arbor, A. (2019). Panel Study of Income Dynamics, public use dataset. Ann Arbor: Institute for Social Research, University of Michigan.
Becker, G. S. (1993). Human Capital: A Theoretical and Empirical Analysis, With Special Reference to Education (3rd edition). Chicago, IL: University of Chicago Press.
Boscaljon, Brian. (2004). Time, Wealth, and Human Capital as Determinants of Asset Allocation. Financial Services Review, 13(3), 167-184.
Bricker, J., Dettling, L. J., Henriques, A., Hsu, J. W., Jacobs, L., Moore, K. B., ... & Windle, R. A. (2017). Changes in US Family Finances from 2013 to 2016: Evidence from the Survey of Consumer Finances. Fed. Res. Bull., 103(3), 1-41. https://doi.org/10.17016/bulletin.2017.103-3
Campbell, J. (2006). Household Finance. Journal of Finance, 61(4), 1553-1604. https://doi.org/10.1111/j.1540-6261.2006.00883.x
Calvet, L. E., Campbell, J. Y., & Sodini, P. (2009). Measuring the Financial Sophistication of Households. American Economic Review, 99(2), 393-398. https://doi.org/10.1257/aer.99.2.393
Cocco, J. F. (2005). Portfolio Choice in the Presence of Housing. The Review of Financial Studies, 18(2), 535-567. https://doi.org/10.1093/rfs/hhi006
Cooper, R., & Zhu, G. (2016). Household Finance Over the Life-Cycle: What Does Education Contribute? Review of Economic Dynamics, 20, 63-89. https://doi.org/10.1016/j.red.2015.12.001
Faig, M., & Shum, P. (2002). Portfolio Choice in the Presence of Personal Illiquid Projects. The Journal of Finance, 57(1), 303-328. https://doi.org/10.1111/1540-6261.00423
Federal Reserve Bank of New York (2021). Household debt and credit report (Q2 2021). Center for microeconomic data. Retrieved from https://www.newyorkfed.org/microeconomics/hhdc
Georgarakos, D., & Pasini, G. (2011). Trust, sociability, and Stock Market Participation. Review of Finance, 15(4), 693-725. https://doi.org/10.1093/rof/rfr028
Grinblatt, M., Keloharju, M., & Linnainmaa, J. (2011). IQ and Stock Market Participation. The Journal of Finance, 66(6), 2121-2164. https://doi.org/10.1111/j.1540-6261.2011.01701.x
Guiso, L., & Jappelli, T. (2005). Awareness and Stock Market Participation. Review of Finance, 9(4), 537-567. https://doi.org/10.1007/s10679-005-5000-8
Guiso, L., & Sodini, P. (2012). Household Finance. An Emerging Field. IDEAS Working Paper Series from RePEc, IDEAS Working Paper Series from RePEc, 2012.
Guiso, Sapienza, & Zingales. (2008). Trusting the Stock Market. Journal of Finance, 63(6), 2557-2600. https://doi.org/10.1111/j.1540-6261.2008.01408.x
Haliassos, M. (2003). Stockholding: Recent Lessons from Theory and Computations. In Stockholding in Europe (pp. 30-49). Palgrave Macmillan, London.
Haliassos, M., & Michaelides, A. (2003). Portfolio Choice and Liquidity Constraints. International Economic Review, 44(1), 143-177. https://doi.org/10.1111/1468-2354.t01-1-00065
Hong, H., Kubik, J. D., & Stein, J. C. (2004). Social interaction and stock‐market participation. The Journal of Finance, 59(1), 137-163. https://doi.org/10.1111/j.1540-6261.2004.00629.x
Kim, J., & Chatterjee, S. (2019). Student Loans, Health, and Life Satisfaction of US Households: Evidence from a Panel Study. Journal of Family and Economic Issues, 1-15. https://doi.org/10.1007/s10834-018-9594-3
Kim, J., Gutter, M. S., & Spangler, T. (2017). Review of Family Financial Decision Making: Suggestions for Future Research and Implications for Financial Education. Journal of Financial Counseling and Planning, 28(2), 253-267. https://doi.org/10.1891/1052-3073.28.2.253
Korankye, & Kalenkoski, C. M. (2021a). The Effect of Households’ Student Debt on Life Satisfaction. Journal of Family and Economic Issues, 42(4), 757–772. https://doi.org/10.1007/s10834-021-09753-
Korankye, T., & Kalenkoski, C. M. (2021b). Student Loan Debt and Financial Well-Being of the Borrower: Does It Matter Whom the Debt Is For?. Journal of Personal Finance, 20(2). https://ssrn.com/abstract=4055654
Korankye, T., & Guillemette, M. (2021). Student Debt and Stock-Ownership Decisions of US Households. Applied Economics Letters, 28(5), 387-390. https://doi.org/10.1080/13504851.2020.1757026
Merton, R. (1973). An Intertemporal Capital Asset Pricing Model. Econometrica, 41(5), 867-887.
Pearson, B., Korankye, T., & Salehi, H. (2021). Comparative Advantage in the Household: Should One Person Specialize in a Household’s Financial Matters?. Journal of Family and Economic Issues, 44 (1), 114-124. https://doi.org/10.1007/s10834-021-09807-y
Vohra, T., & Kaur, M. (2016). Awareness and Stock Market Participation of Women: A Comparative Study of Stock Investors and Non-Investors. IUP Journal of Management Research, 15(4), 22-38. https://web.s.ebscohost.com/ehost/pdfviewer/pdfviewer?vid=0&sid=8ff3b055-9791-4de1-a303-08c77b31c4d4%40redis