Student debt and stock-ownership decisions of U.S. households

Thomas Korankye and Michael Guillemette

Applied Economics Letters, 2021, vol. 28, issue 5, 387-390

Abstract: This study contributes to the literature on the stock-holding puzzle by examining the effects of student debt on the decision of U.S. households to own stocks in non-retirement accounts. The study uses longitudinal data from the 2011 to 2017 U.S. Panel Study of Income Dynamics for the analyses. The results show that households with student debt have a lower probability of owning stocks in a non-retirement account compared to households without student debt. The results also show that the amount of student debt is associated negatively to the decision to own stocks in a non-retirement account. The findings suggest that the financial constraints associated with student debt may influence stock ownership in a non-retirement account.

Date: 2021
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DOI: 10.1080/13504851.2020.1757026

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