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ERIC Number: EJ792699
Record Type: Journal
Publication Date: 2008
Pages: 30
Abstractor: Author
Reference Count: 49
ISSN: ISSN-0022-166X
Borrowing during Unemployment: Unsecured Debt as a Safety Net
Sullivan, James X.
Journal of Human Resources, v43 n2 p383-412 Spr 2008
This paper examines whether unsecured credit markets help disadvantaged households supplement temporary shortfalls in earnings by investigating how unsecured debt responds to unemployment-induced earnings losses. Results indicate that very low-asset households--those in the bottom decile of total assets--do not borrow in response to these shortfalls. However, other low-asset households do borrow, increasing unsecured debt by more than 11 cents per dollar of earnings lost. In contrast, wealthy households do not increase unsecured debt during unemployment. The evidence suggests that very low-asset households do not have sufficient access to unsecured credit to smooth consumption over transitory unemployment spells. (Contains 5 tables, 1 figure and 30 footnotes.)
University of Wisconsin Press. 1930 Monroe Street, Madison, WI 53711-2059. Tel: 608-263-0668; Fax: 608-263-1173; e-mail:; Web site:
Publication Type: Journal Articles; Reports - Evaluative
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A