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Analysis of the structural changes in household debt distribution by householder age in Korea and in the US

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Title Analysis of the structural changes in household debt distribution by householder age in Korea and in the US
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Material Type Articles
Author(English)

Kim, Jiseob

Publisher

[Sejong]:Korea Development Institution

Date 2015
Journal Title; Vol./Issue KDI Journal of Economic Policy:vol. 37(no. 4)
Pages 34
Subject Country United States(Americas)
South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Social Development < Population
Holding Korea Development Institution; KDI School

Abstract

This paper analyzes how and why household debt distribution by the householder age has changed over the past decade both in Korea and the US. Data shows that the proportion of household debt held by younger households has decreased, while that held by older households has increased. Empirical analysis shows that a change in
the demographic distribution of householders is the main driving force that has shifted the household debt distribution. Given that demographic aging is an inevitable trend, the proportion of household debt held by older households is also expected to increase. Therefore, the Korean government must preemptively prepare for the household debt problem, especially for debt held by older households, by strengthening macro-prudential policies, preventing asset price deflation, restructuring household debt contract structures, and reforming labor market inflexibility.