• Journal of Family Resource Management and Policy Review
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• v.26 no.3
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• pp.19-34
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• 2022

There are growing concerns about debt insolvency among youth and low-income households. The deterioration in household debt quality among young people is due to a combination of sluggish employment, an increase in student loan burden and an increase in high-interest loans from the secondary financial sector. The purpose of this study was to explore the possibility of household debt default among young borrowers in Korea and to predict the factors affecting this possibility. This study utilized the 2021 Household Finance and Welfare Survey and used random forest algorithm to comprehensively analyze factors related to the possibility of default risk among young adults. This study presented the importance index and partial dependence charts of major determinants. This study found that the ratio of debt to assets(DTA), medical costs, household default risk index (HDRI), communication costs, and housing costs the focal independent variables.

• Journal of Family Resource Management and Policy Review
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• v.23 no.2
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• pp.99-115
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• 2019

This study examined the insolvency likelihood of young debtors from the 2018 Household Financial and Welfare Survey. This study used the Household Default Risk Index (HDRI), which considers the ratio of total debt to total assets (DTA), and a total debt service ratio (DSR) to examine the insolvency level of debtors. The descriptive analyses showed no difference in frequency of households with a high probability of insolvency between those less than 35 years of age and those over 35 years of age. However, the median HDRI value for those less than 35 years of age was higher than those over 35 years of age. The multivariate analyses indicated that educational expenses for young Korean debtors was a factor that increased their probability of insolvency, while income was the only variable that decreased their insolvency likelihood.