Next i explore the fresh determinants from 401(k) mortgage defaults, beginning with brand new summation statistics searching in Table 5
In one single season, in the you to definitely-5th regarding loan-eligible group within try had no less than one loans outstanding. But among players terminating employment having a fantastic fund, 86 percent didn’t repay the outstanding financing (the others reduced the membership fund so because of this stopped default). Once the professionals defaulting on the bundle financing totaled to 10 % of all the professionals having a great financing, we estimate you to throughout the 90 per cent off participants paid off its money along the four-season several months seen. 23
Dining table 5
Statistics contrasting participants who defaulted in place of paid their money are available in Desk six , in addition to analysis toward most of the individuals and all of financing-eligible bundle users. The brand new sample from defaulters contains 130,295 professionals from inside the 401(k) preparations just who ended a position that have a minumum of one loan a fantastic. twenty-four Compared to the most other plan individuals, they certainly were a little younger, had less employment period, and you can held down balance. People that defaulted on the loans also got low income, lower balances, together with faster low-old age wealth, than others just who paid off its financing toward leaving its jobs.
Table six
To compare employees who terminated employment and defaulted on their 401(k) loans with those leaving employment who repaid their loans in full more rigorously, we next estimate a multivariate Probit model where the dependent variable, Dwe,j,t, refers to the probability of individuals terminating their jobs and defaulting. Continúa leyendo Next i explore the fresh determinants from 401(k) mortgage defaults, beginning with brand new summation statistics searching in Table 5
