Academy of Financial Services Annual Meeting 2022

Big five personality traits, Baby boomers, Student loan for children’s education, Student loan debt, National Longitudinal Survey of Youth 1979

This study investigates the relationship between baby boomers’ personality traits and their student loan indebtedness in the United States. The paper uses 2014 dataset from the 1979 cohort of the U.S. National Longitudinal Survey of Youth (NLSY79), applies survey weights, estimates two main probit models, and computes marginal effects. The results reveal that those with greater openness are more likely to have student loans for themselves and their children. Additional analyses based on core/trailing boomer status show the differing roles of each personality trait on student loan indebtedness. Factors such as financial literacy and household wealth are not included in the analysis due to limitations from the NLSY79 dataset. In addition, causation cannot be inferred from our analysis, given that we used cross-sectional data. The findings build upon the literature with evidence that personality is significantly associated with student loan decision-making and that this relationship is robust to translate into student debt management behavior.