Crossley, Thomas F and Low, Hamish W (2014) Job Loss, Credit Constraints, and Consumption Growth. Review of Economics and Statistics, 96 (5). pp. 876-884. DOI https://doi.org/10.1162/rest_a_00417
Crossley, Thomas F and Low, Hamish W (2014) Job Loss, Credit Constraints, and Consumption Growth. Review of Economics and Statistics, 96 (5). pp. 876-884. DOI https://doi.org/10.1162/rest_a_00417
Crossley, Thomas F and Low, Hamish W (2014) Job Loss, Credit Constraints, and Consumption Growth. Review of Economics and Statistics, 96 (5). pp. 876-884. DOI https://doi.org/10.1162/rest_a_00417
Abstract
We use direct evidence on credit constraints to study their importance for household consumption growth and for welfare. We distentangle the direct effect on consumption growth of a currently binding credit constraint from the indirect effect of a potentially binding credit constraint that generates consumption risk. Our data are focused on job losers. We find that less than 5% of job losers experience a binding credit constraint, but those who do experience significant welfare losses, and consumption growth is 24% higher than for the rest of the population. However, even among those who are unconstrained and are able to borrow if needed, consumption responds to transitory income.
Item Type: | Article |
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Uncontrolled Keywords: | E21; D12; credit constraints; job loss; consumption; income |
Subjects: | H Social Sciences > HA Statistics H Social Sciences > HB Economic Theory H Social Sciences > HG Finance |
Divisions: | Faculty of Social Sciences Faculty of Social Sciences > Economics, Department of |
SWORD Depositor: | Unnamed user with email elements@essex.ac.uk |
Depositing User: | Unnamed user with email elements@essex.ac.uk |
Date Deposited: | 06 Nov 2013 20:32 |
Last Modified: | 30 Oct 2024 19:55 |
URI: | http://repository.essex.ac.uk/id/eprint/8274 |
Available files
Filename: rest_a_00417.pdf