The Impact of Debt on Job-Search Behavior Among South-Korean Low-Income Youths: Focusing on the Mediating Effect of Self-Esteem

Abstract

This study aims to investigate the mediating effect of self-esteem in the path from the burden of debt to job-search behavior among South-Korean low-income youths under a economic recession. Using data from the Second Panel Study on the Participants of the Youth Hope Growing Account (YHGA) program in Korea, this study tested a theoretical model using structural equation modeling (SEM) with maximum likelihood (ML) estimation. The mediation effect was estimated using bootstrapping. The results revealed a significant effect of debt burden on job-search behavior, which was fully mediated by self-esteem. These findings suggest the necessity of providing financial and psychological support for economically disadvantaged youth to facilitate successful entry into the labor market in South Korea. Study about the relationship between job-search behavior, burden of debt, and self-esteem among South Korean youths in povertyYouth in South Korea face multidimensional difficulties encompassing economic, psychological, and social aspects, driven by high unemployment rates and insecure employment statuses. Youth from low-income backgrounds often endure precarious low-wage jobs without resources or time to prepare for better employment, perpetuating the cycle of poverty. Given these circumstances, it is crucial for youth to persist in job-search behaviors, with psychological resilience playing a vital role in navigating challenging circumstances. This study aims to examine the impact of debt burden as an indicator of economic hardship on job-search behavior and the mediating role of self-esteem. The study found that the burden of debt is negatively associated with self-esteem and self-esteem fully mediates the relationship between the burden of debt and job-search behavior. It means that burden of debt does not have a direct significant impact on job-search behavior since it has a significant impact on self-esteem, which also has a significant impact on job-search behavior. Therefore, interventions to improve the self-esteem of impoverished youths are demanded, considering that the self-esteem is important factor for the youths. In this respect, psychological or counseling programs for enhancing the self-esteem and psychological well-being of young people should be provided in both universities and local communities. Policies such as debt reduction and housing support might be helpful for the disadvantaged youths from low-income families in terms of increasing their disposable income and reducing economic hardship.