Research On The Impact Of Household Debt On Its Economic Vulnerabilit

With the outbreak of COVID-19,the global economic environment,employment market and industrial structure are changing.The risk impact brought by the epidemic includes not only health risks,but also the economic and social chain reaction,which has a great impact on the economic situation of Chinese families.Household economic vulnerability not only reflects the changes of the overall welfare of the family,but also reflects the ability of the family to cope with risks.The ability of Chinese households to cope with risks in the face of unexpected shocks needs to be further strengthened.At the same time,along with the economic development,a prominent economic feature of Chinese households is the rapid growth of debt,the high leverage of the residential sector has caused widespread concern from all walks of life.The risks of rising leverage and unreasonable structure of assets and liabilities greatly test the risk management and coping ability of residents.If the risk resistance ability of households is insufficient,the probability of falling into poverty or worsening poverty increases,and the economic vulnerability of households is worth paying attention to.Based on the data of 2019 Chinese Household Finance Survey(CHFS)and VEP method,this paper empirically analyzes the impact of household debt level on economic vulnerability by using feasible three-stage generalized least squares(FGLS)method.The findings: The increase of household asset-liability ratio significantly aggravates the vulnerability of the economy.With each standard deviation increase of household asset-liability ratio,the probability of household economic vulnerability will increase by 0.516 and 0.977 percentage points.In this paper,the instrumental variable method will be used to alleviate the endogenous problems existing in the model.After changing regression methods,using panel data,changing survey samples and other problems,this conclusion is still robust.The threshold regression shows that the threshold value of the asset-liability ratio on household economic vulnerability is about 33%,but the regression coefficient symbol before and after the threshold value does not change,indicating that the asset-liability ratio has no non-linear effect on household economic vulnerability.The mechanism analysis shows that residents’ health status and emergency savings play a mediating role in the relationship between debt and household economic vulnerability.The continuous increase of household debt will worsen the health status of household heads,reduce the emergency savings held by households,and make it difficult for households to cope with risk shocks and increase their economic vulnerability.Heterogeneity analysis found that rural households to urban families are more easily affected by risk impact,head of the household of the older families than in young and middle-aged family’s ability to resist risk is lower and commercial health insurance compared to not buy family cope with the risk ability is stronger,and family raise heavier family more easily after a hit from the risk and into poverty.The conclusions of this paper are helpful to expand and deepen the research on the influencing factors of household economic vulnerability,consolidate the achievements of "poverty alleviation" and expand the middle-income group.