Table 7.

Determinants of the Probability of Participants Defaulting on 401(k) Plan Loans Outstanding upon Job Termination

		Probability of defaulting on 401(k) loans outstanding (Probit)
	Mean	Estimate		(SE)	Marginal effect (%)
Plan design factors
Multiple loans allowed	0.48	−0.063	***	0.010	−1.15
Loan interest rate (%)	7.08	−0.004		0.003	−0.07
Participant characteristics
Age 35–45	0.31	−0.029		0.013	−0.53
Age 45–55	0.26	−0.040	***	0.014	−0.73
Age 55–60	0.10	0.021		0.019	0.37
Age > 60	0.07	0.070	***	0.022	1.23
Male	0.48	0.010		0.011	0.19
Tenure	8.47	−0.003		0.002	−0.05
Tenure**2	118.21	0.000		0.000	0.00
Income < $35,000	0.15	0.044	***	0.015	0.78
Income > $87,500	0.27	−0.097	***	0.011	−1.82
Low wealth	0.65	0.115	***	0.011	2.15
High wealth	0.11	−0.140	***	0.015	−2.73
Ln(401(k) account balance)	9.88	−0.400	***	0.007	−3.34
Ln Loan balance	8.11	0.282	***	0.004	82.37
Macroeconomic variables
Financial turmoil period (%)	0.22	0.033	**	0.017	0.60
Lagged state unemployment rate (%)	5.36	−0.003		0.004	−0.06
Industry controls		Yes
Plan mean variables		Yes
Intercept		2.324	***	0.134
No. observations		151,458
Mean of dependent variable		0.86
Pseudo R-squared		0.121

Note:

^**Significant at 0.05 level,

^***significant at 0.01 level.

Plan means included to control for fixed effects.