Household debt overhang and human capital investment

• 成果类型: Article
• 署名作者: Manso, Gustavo; Rivera, Alejandro; Wang, Hui (Grace); Xia, Han
• 署名单位: University of California System; University of California Berkeley; University of Texas System; University of Texas Dallas; Bentley University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2025.104141
• 发表日期: 2025
• 关键词: Household indebtedness; human capital investment; Labor skills acquisition; Debt overhang; Household default

摘要

Unlike labor income, human capital is inseparable from individuals and does not completely accrue to creditors. Therefore, human capital investment is more resilient to debt overhang than labor supply. We develop a dynamic model displaying this difference. We find that while both labor supply and human capital investment are hump-shaped in household indebtedness, human capital investment declines less aggressively as indebtedness builds up. Importantly, because human capital is only valuable when households expect to supply labor, the greater reduction in labor supply due to debt overhang back-propagates into ex-ante human capital investment. We provide empirical support for the model.