Do Community Characteristics Relate to Young Adult College Students’ Credit Card Debt? The Hypothesized Role of Collective Institutional Efficacy

• Published in: American journal of community psychology Vol. 59; no. 1-2; pp. 80 - 93
• Main Authors: Friedline, Terri, West, Stacia, Rosell, Nehemiah, Serido, Joyce, Shim, Soyeon
• Format: Journal Article
• Language: English
• Published: England Blackwell Science Ltd 01.03.2017
• Subjects: Banking, Personal; Children; Collective institutional efficacy; College students; Community‐level effects; Credit; Credit card debt; Credit cards; Debt; Ethnic Groups - statistics & numerical data; Family Characteristics; Female; Financial Management; Financial socialization; Humans; Income; Income - statistics & numerical data; Longitudinal Studies; Male; Parent-child relations; Parents & parenting; Residence Characteristics - statistics & numerical data; Socioeconomic Factors; Students; Surveys and Questionnaires; Unemployment; Unemployment - statistics & numerical data; Universities; Young Adult; Young adults; United States > US; Young adults; Community-level effects; Financial socialization; Collective institutional efficacy; Credit card debt
• ISSN: 0091-0562; 1573-2770
• DOI: 10.1002/ajcp.12116

This study examines the extent of emergent, outstanding credit card debt among young adult college students and investigates whether any associations existed between this credit card debt and the characteristics of the communities in which these students grew up or lived. Using data (N = 748) from a longitudinal survey and merging community characteristics measured at the zip code level, we confirmed that a community's unemployment rate, average total debt, average credit score, and number of bank branch offices were associated with a young adult college student's acquisition and accumulation of credit card debt. For example, a community's higher unemployment rate and lower number of bank branches were associated with a young adult college student's greater accumulated debt. Community characteristics had the strongest associations with credit card debt, especially after controlling for individual characteristics (i.e., a young adult college student's race and financial independence) and familial characteristics (i.e., their parents’ income and parents’ discussions of financial matters while growing up at home). The findings may help to understand the unique roles that communities play in shaping children and young adults’ financial capability, and how communities can be better capacitated to support the financial goals of their residents.