Negative Net Worth and the Life Cycle Hypothesis

• DOI: 10.2139/ssrn.2116323
• Publication Date: 2012-07-25T11:04:33Z
• Authors: Travis Mountain; Sherman D. Hanna
• Keywords: 0502 economics and business; 05 social sciences; 8. Economic growth; 1. No poverty

Life cycle theory is applied to determine which households are more likely to have negative net worth. Negative net worth household characteristics are examined using data from the 1992, 1995, 1998, 2001, 2004, and 2007 Survey of Consumer Finances. Logit Analysis showed households in survey years 1995 and 2001 are less likely to have negative worth compared to the most recent 2007 survey while young, educated households are also more likely to have negative net worth.