Research Repository

Job loss, credit constraints, and consumption growth

Crossley, TF and Low, HW (2014) 'Job loss, credit constraints, and consumption growth.' Review of Economics and Statistics, 96 (5). 876 - 884. ISSN 0034-6535

[img]
Preview
Text
rest_a_00417.pdf - Published Version

Download (183kB) | Preview

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
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HB Economic Theory
H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 06 Nov 2013 20:32
Last Modified: 30 Mar 2021 20:15
URI: http://repository.essex.ac.uk/id/eprint/8274

Actions (login required)

View Item View Item