Student Loans and Housing Behaviors: Focused on Korean Millennials

Abstract

This study examines how student loans affect housing behaviors of millennials. Using the 2014-2020 Youth Panel data provided by the Korea Employment Information Service, regression analysis reveals that the experience of student loans and the loan amount itself do not have significant effects on independence from parents, but loan repayment burden and delay seem to have negative effects on independence from parents. As the amount of student loans increases, millennials tend to choose cheonsei and monthly rent, instead of homeownership when they leave from their parents. This trend was more pronounced when experiencing the burden of loan repayment. Also, as the amount of student loans increases, millennials tend to choose row houses, villas, and multi-family homes, instead of single family housing or apartment. This trend was more evident when experiencing the burden of repaying loans. In conclusion, it was found that millennials have difficulties in leaving from their parents and achieving homeownership when experiencing the financial burden for student loans. This study presents policy implications for the housing issue of millennials.