Abstract
As part of the Center for Financial Security’s 2010 symposium, this study examined the association between consumer debt and divorce. Longitudinal data from the National Survey of Families and Households (N = 4,574 couples) indicated that consumer debt was positively associated with divorce. Financial conflict completely mediated this association for both husbands and wives and marital satisfaction also completely mediated the association for wives. These findings suggest that when families take financial steps to secure their financial stability they may also be taking steps to secure their relationship stability.
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Notes
Age, though used in other studies, was not a selection criterion for this study. Consequently, this study has a large age range of participants. To ensure that the findings were robust with respect to age, I conducted the analyses after dropping anyone over age 61 (e.g., retirement age) and anyone under the age of 21. The findings were unchanged (not shown).
This study did not use automobile loans because they have both an asset and a liability component and are typically secured loans. Further, the loan amount is not revolving, the interest rates are fixed and are much lower than interest rates on typical consumer debt.
Less than 1.5% of the participants had negative equity. Because it is impossible to take the log of a negative number, I set these values equal to 0.
I conducted two additional sensitivity analysis regarding income (not shown). First, I used a dummy variable to represent being in the lowest income quartile (0 = income above the lowest quartile, 1 = income in the lowest quartile). This dummy variable was not a significant predictor of divorce in the models. I also tried using 3 dummy variables to represent the 3 lowest income quartiles. Relative to the highest income quartile, none of the other 3 groups had higher hazards of divorce.
I ran the analyses with self-reported health as a control covariate (not shown). Self-reported health was not associated with divorce and was only weakly correlated (at best) with consumer debt (r = .02, p < .001 for husbands, consumer debt was uncorrelated to wives’ self-reported health).
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Dew, J. The Association Between Consumer Debt and the Likelihood of Divorce. J Fam Econ Iss 32, 554–565 (2011). https://doi.org/10.1007/s10834-011-9274-z
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DOI: https://doi.org/10.1007/s10834-011-9274-z