Can’t afford a baby? Debt and young Americans

Nau, Michael; Dwyer, Rachel E.; Hodson, Randy

doi:10.1016/j.rssm.2015.05.003

Cited by 67 publications

(58 citation statements)

References 32 publications

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“…Racial disparities in student loan debt may also have larger implications for the transition to adulthood. Recent research shows that student loan debt is associated with delayed childbearing (Nau et al 2015), and marriage (Addo 2014), and as such rising debt may contribute to growing racial differences in successful transitions to adulthood (Furstenberg et al 2004). Given that blacks experience lower labor market returns to college than whites (Gaddis 2015), while also facing higher debt burdens and dropout risk, black young adults take a great deal more risk of enrolling in college, and reap fewer rewards to that risk.…”

Section: Discussionmentioning

confidence: 99%

Young, Black, and (Still) in the Red: Parental Wealth, Race, and Student Loan Debt

2016

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Taking out student loans to assist with the costs of postsecondary schooling in the US has become the norm in recent decades. The debt burden young adults acquire during the higher education process, however, is increasingly stratified with black young adults holding greater debt burden than whites. Using data from the NLSY 1997 cohort, we examine racial differences in student loan debt acquisition and parental net wealth as a predictor contributing to this growing divide. We have four main results. First, confirming prior research, black young adults have substantially more debt than their white counterparts. Second, we find that this difference is partially explained by differences in wealth, family background, postsecondary educational differences, and family contributions to college. Third, young adults’ net worth explain a portion of the black–white disparity in debt, suggesting that both differences in accumulation of debt and ability to repay debt in young adulthood explain racial disparities in debt. Fourth, the black–white disparity in debt is greatest at the highest levels of parents’ net worth. Our findings show that while social and economic experiences can help explain racial disparities in debt, the situation is more precarious for black youth, who are not protected by their parents’ wealth. This suggests that the increasing costs of higher education and corresponding rise in student loan debt are creating a new form of stratification for recent cohorts of young adults, and that student loan debt may be a new mechanism by which racial economic disparities are inherited across generations.

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Section: Discussionmentioning

confidence: 99%

Young, Black, and (Still) in the Red: Parental Wealth, Race, and Student Loan Debt

2016

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“…Among older, previously-married Americans, wealth accelerates both cohabitation and remarriage (Vespa 2012). For women, student debt is associated with fertility delay, while both mortgages and credit card debt accelerate transitions to parenthood (Nau et al 2015). …”

Section: Part Iii: Evidence On Wealth Consequences and Determinantsmentioning

confidence: 99%

“…For example, Schneider (2011) hypothesizes that in the marriage market possessing an asset may be more important than the asset’s value because asset ownership already signals marriageability. Likewise, Addo (2014) hypothesizes that credit card debt and education debt may be associated differently with union formation, due to the different financial structure and normativity of different types of debt, and Nau et al (2015) consider how different types of debt are associated with fertility timing. Although the authors do not always find unequivocal support for their hypotheses, their approaches illustrate the importance both of conceptualizing wealth as a cultural marker, not just a stock of financial resources, and of empirically identifying how wealth produces effects by disaggregating net worth into theoretically relevant components.…”

Section: Part Iii: Evidence On Wealth Consequences and Determinantsmentioning

confidence: 99%

Wealth Inequality and Accumulation

2017

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Research on wealth inequality and accumulation and the data upon which it relies have expanded substantially in the twenty-first century. While the field has experienced rapid growth, conceptual and methodological challenges remain. We begin by discussing two major unresolved methodological concerns facing wealth research: how to address challenges to causal inference posed by wealth’s cumulative nature and how to operationalize net worth, given its highly skewed nature. To underscore the need for continued empirical attention to net worth, we review trends in wealth levels and inequality and evaluate wealth’s distinctiveness as an indicator of social stratification. Next, we provide an overview of data sources available for wealth research. We then review recent empirical evidence on the effects of wealth on other social outcomes, as well as research on the determinants of wealth. We close with a list of promising avenues for future research on wealth, its causes, and its consequences.

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“…Student‐loan debt in particular has been linked to higher levels of overall stress and anxiety (Andruska et al ) and lower levels of well‐being (Archuleta, Dale, and Spann ; West, Shanafelt, and Kolars ). In addition to studies showing that student‐loan debt causes stress, it has also been cited as a factor that can influence an individual after college, when decisions related to home ownership, family building, and career advances are most often made (William and Lewis ), and, too, decisions about whether to delay marriage (ASA ; Baum and O'Malley ) and when or whether to have children (Nau, Dwyer, and Hodson ). Given these findings and conclusions, we thus expected to find that the greater difficulty young adults experience regarding student‐loan repayment, the greater the stress they would report (hypothesis 4).…”

Section: Conceptual Model Development and Hypothesesmentioning

confidence: 99%

Problem‐Solving Orientations, Financial Self‐Efficacy, and Student‐Loan Repayment Stress

Shim¹,

Serido²,

Lee³

2018

Journal of Consumer Affairs

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Using data acquired from a four‐time longitudinal survey, we tested a model linking two measures of self‐agency, i.e., problem‐solving orientations and financial self‐efficacy, to student‐loan repayment stress. Of those participants who responded at Wave 4 (N = 855) of a longitudinal study, 396 who had acquired student loans were included in our structural equation model's Mplus analysis. After we controlled for gender, college financial education, ethnicity, and participant annual income, we found that both financial self‐efficacy and negative problem‐solving orientation were related to perceived difficulty. More specifically, those participants with a greater financial self‐efficacy at Wave 4 perceived less difficulty in paying off their loans, while those with a more negative problem‐solving orientation perceived more difficulty in paying off their loans. We also found perceived difficulty to be directly related to the actual difficulty of repaying a loan, and this perceived difficulty was, in turn, associated with loan‐specific stress. We provide implications for financial education.

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Can’t afford a baby? Debt and young Americans

Cited by 67 publications

References 32 publications

Young, Black, and (Still) in the Red: Parental Wealth, Race, and Student Loan Debt

Young, Black, and (Still) in the Red: Parental Wealth, Race, and Student Loan Debt

Wealth Inequality and Accumulation

Problem‐Solving Orientations, Financial Self‐Efficacy, and Student‐Loan Repayment Stress

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