The most incisive guide to issues facing the American family today . . . An invaluable resource for anyone wishing to stay on the cutting edge of research on family trends.

-W. Bradford Wilcox
Associate Professor of Sociology, University of Virginia 

The Natural Family: A Natural Debt Preventative

Bryce J. Christensen and Nicole M. King

Much talk lately has centered on the question of rampant consumer debt. Most agree that Americans spend too much that they do not have, but in a recent study, Richard K. Caputo of Yeshiva University seeks to paint a more complete picture of the American debtor.

The goals of the study are threefold: “(1) to examine the prevalence, depth, and patterns of consumer debt over time; (2) to explore the influence of sociodemographic background characteristics . . . ; and (3) to determine what characteristics or attributes, if any, differentiate chronic from short-term and intermittent debtors.” One important find: Growing up in a two-parent home and marrying are both good for the avoidance of chronic debt.

Caputo notes that although much attention in scholarly research has been given to “factors associated with consumer debt,” most of that research thus far has presented an “incomplete” picture of the “prototypical debtor.” Furthermore, Caputo was interested in differentiating between short-term debt, which is relatively unproblematic, and longterm debt, a more serious social problem.

Caputo gleaned his sample from the National Longitudinal Survey of Youth (NLSY79) and used net worth as his basis for evaluating level of debt. “Debtors” he defined as “those whose annual family net worth fell below $0.00.” “Non-debtors” were “those who reported no debt in any survey year between 1985 and 2008.” “Short-term debtors” were those who “reported one year of debt.” “Intermittent debtors” reported two to four years of debt, and “chronic debtors” reported five or more years.

Caputo used two different measures to capture socioeconomic status (SES): “the average income-to-poverty ratio (IPR) and the average wealth-to-income ratio (WIR).” “Background sociodemographic measures,” he reports, “included age, race/ethnicity, sex, SES in 1979, and three measures of respondents’ living circumstances at age 14: whether they lived with both parents, whether they lived in the U.S. South, and whether they lived in an urban area.” Another measure was marital status in 2008. In addition, Caputo measured for locus of control and self-esteem, to judge the impact of psychological factors in accruing debt.

Caputo found that “over half the study sample (54.6% weighted, n=2,614) reported no years of net debt” during the years 1985-2008. A little over 15% reported one year (making them “short-term debtors”), over 21% reported two to four years (intermittent debtors), and over 8% reported five years or more (chronic debtors). Most interesting were the findings on family structure. Caputo discovered, “Five measures were found to be sufficiently robust predictors distinguishing intermittent and chronic debtors from non-debtors: locus of control, living with mother and father at age 14, marital status in 2008, SES measured as average IPR between 1985 and 2008, and average annual number of weeks worked between 1985 and 2008.” Caputo reports further, “Those living with mother and father at age 14 were 1.19 times more likely than those in other living arrangements to be non-debtors than were intermittent debtors, and 1.55 times more likely to be non-debtors than were chronic debtors.” In other words, “These findings suggest that there is something about two-parent families, beyond the prospect of two income or wealth streams, which enables them to manage their financial situations such that they are less likely to experience intermittent or chronic debt.”

But in spite of this and the fact that “[s]eparated, widowed, or divorced persons are much less likely than married persons to avoid debt than they are to be either intermittent or chronic debtors,” Caputo warns that, “It would be incorrect to infer that the institution of marriage is the explanatory factor.” Caputo cautions that his study “lacks the experimental controls to establish causality. It is quite plausible that those who enter into marriage self-select by virtue of their initial commitments . . . ”

In spite of Caputo’s caution at granting the institution of marriage any special favors, the implications are clear: Something about two-parent homes is innately good for adolescents in developing responsible behavior, and something about marriage is particularly good at sustaining a responsible fiscal environment.

(Richard K. Caputo, “Patterns and Predictors of Debt: A Panel Study, 1985-2008,” Journal of Sociology & Social Welfare XXXIX, Number 2 [June 2012]: 7-29. Emphasis added.)