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Table 10.
Bankruptcy and Foreclosure: Borrower-Savers versus Savers, 2008 Classification
(1)(2)(3)(4)
Bankruptcy, 2009–2012Foreclosure, 2009–2012
BaselineStrictBaselineStrict
Borrower-saver 2008 0.031*** 0.017** 0.024*** 0.014 
 (0.006) (0.007) (0.009) (0.009) 
Present bias 0.010 0.012 0.004 −0.012 
 (0.008) (0.011) (0.009) (0.009) 
High discount rate 0.022*** 0.019*** 0.030*** 0.005 
 (0.005) (0.006) (0.009) (0.010) 
Middle risk aversion 0.005 −0.002 0.015 0.013 
 (0.006) (0.008) (0.011) (0.009) 
College or more −0.004 0.001 −0.016** −0.023** 
 (0.007) (0.008) (0.007) (0.010) 
Financial literacy 0.006 0.003 0.019 0.008 
 (0.008) (0.009) (0.013) (0.013) 
Financial knowledge −0.004 −0.011 −0.006 0.009 
 (0.009) (0.009) (0.010) (0.010) 
Log debt, 2008 0.001 0.001 0.002*** 0.001** 
 (0.001) (0.001) (0.001) (0.001) 
Log assets, 2008 0.001 0.004 0.001 0.002 
 (0.003) (0.004) (0.007) (0.008) 
Assets > debt, 2008 −0.080*** −0.086** −0.101*** −0.062 
 (0.021) (0.037) (0.026) (0.038) 
Self-employed, 2008 0.025** 0.018* 0.044*** 0.034** 
 (0.011) (0.010) (0.012) (0.013) 
Bankruptcy, pre-2009 −0.055*** −0.029*** 0.035* −0.030** 
 (0.009) (0.010) (0.020) (0.015) 
Health shock 0.042** 0.027 0.031 −0.021** 
 (0.020) (0.027) (0.024) (0.010) 
Divorce shock 0.021 0.074** 0.111** 0.042 
 (0.020) (0.034) (0.048) (0.054) 
Observations 2,437 1,178 2,069 1,067 
R2 0.07 0.10 0.11 0.11 
(1)(2)(3)(4)
Bankruptcy, 2009–2012Foreclosure, 2009–2012
BaselineStrictBaselineStrict
Borrower-saver 2008 0.031*** 0.017** 0.024*** 0.014 
 (0.006) (0.007) (0.009) (0.009) 
Present bias 0.010 0.012 0.004 −0.012 
 (0.008) (0.011) (0.009) (0.009) 
High discount rate 0.022*** 0.019*** 0.030*** 0.005 
 (0.005) (0.006) (0.009) (0.010) 
Middle risk aversion 0.005 −0.002 0.015 0.013 
 (0.006) (0.008) (0.011) (0.009) 
College or more −0.004 0.001 −0.016** −0.023** 
 (0.007) (0.008) (0.007) (0.010) 
Financial literacy 0.006 0.003 0.019 0.008 
 (0.008) (0.009) (0.013) (0.013) 
Financial knowledge −0.004 −0.011 −0.006 0.009 
 (0.009) (0.009) (0.010) (0.010) 
Log debt, 2008 0.001 0.001 0.002*** 0.001** 
 (0.001) (0.001) (0.001) (0.001) 
Log assets, 2008 0.001 0.004 0.001 0.002 
 (0.003) (0.004) (0.007) (0.008) 
Assets > debt, 2008 −0.080*** −0.086** −0.101*** −0.062 
 (0.021) (0.037) (0.026) (0.038) 
Self-employed, 2008 0.025** 0.018* 0.044*** 0.034** 
 (0.011) (0.010) (0.012) (0.013) 
Bankruptcy, pre-2009 −0.055*** −0.029*** 0.035* −0.030** 
 (0.009) (0.010) (0.020) (0.015) 
Health shock 0.042** 0.027 0.031 −0.021** 
 (0.020) (0.027) (0.024) (0.010) 
Divorce shock 0.021 0.074** 0.111** 0.042 
 (0.020) (0.034) (0.048) (0.054) 
Observations 2,437 1,178 2,069 1,067 
R2 0.07 0.10 0.11 0.11 

Linear probability regressions. The dependent variables are dummies equal to 1 if the respondent filed for bankruptcy or went through foreclosure during the specified periods. All regressions control for demographics (age, race, gender, marital status, presence of kids), AFQT scores, and state fixed effects. Standard errors (in parentheses) clustered at the state level. Significant at ***1%, **5%, and *10%.

Source: NLSY79.

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