Piotr Bolibok



The paper aims at empirical investigation of the key macroeconomic drivers of household debt-to-income ratio in the OECD countries using a panel data regression analysis to control for the time-invariant country-specific effects. The examined sample covers 31 countries over the period 1996–2015, yielding an unbalanced panel of 439 country-year observations. The results of the fixed-effect panel regression analysis indicate that the household debt-to-income ratio is positively related to the average annual wages, the share of population aged 25–39, the share of population with tertiary education attainment, and the magnitude of the wage-productivity gap. The interest rate and the unemployment rate seem to affect the ratio negatively, although the latter relationship turns out to be statistically insignificant. Contrary to the evidence in the relevant literature, however, after controlling for the country-specific effects, the rate of economic growth and income inequality have been found to affect the debt-to-income ratio negatively. These unexpected results might reflect the likely distortions caused by the recent global financial crisis that has significantly hampered the economic growth and increased the unemployment rate in many developed countries, while the overall household indebtedness has remained elevated. It is also plausible that a positive impact of income inequality on household indebtedness might be largely limited geographically as it reverses when a larger set of countries is examined.


household indebtedness; determinants of indebtedness; debt-to-income ratio; OECD countries

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ISSN 2300-1240 (print)
ISSN 2300-3065 (online)

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