Household Sector Borrowing in the Euro Area - A Micro Data Perspective

41 Pages Posted: 12 Apr 2011

See all articles by Adriana Lojschova

Adriana Lojschova

European Central Bank (ECB)

Ramon Gomez Salvador

European Central Bank (ECB)

Thomas Westermann

European Central Bank (ECB)

Date Written: April 8, 2011

Abstract

This paper uses micro data from the European Union Statistics on Income and Living Conditions (EU-SILC) to generate structural information for the euro area on the incidence of household indebtedness and the debt service burden. It breaks down incidence by characteristics such as income, age and employment status, all features that can be cross-referenced in the light of theories such as the life-cycle hypothesis. Overall, income appears to be the dominant feature determining the debt status of a household. The paper also examines the evolution of indebtedness and debt service burdens over time and compares the situation in the euro area with that in the United States. In general, the results suggest that the macroeconomic implications of indebtedness for monetary transmission and financial stability are not associated with the mean but with the tails of the distribution.

Keywords: Household indebtedness, fi nancial vulnerability, micro survey data, monetary transmission

JEL Classification: C42, D12, D14, G21

Suggested Citation

Lojschova, Adriana and Salvador, Ramon Gomez and Westermann, Thomas, Household Sector Borrowing in the Euro Area - A Micro Data Perspective (April 8, 2011). ECB Occasional Paper No. 125. Available at SSRN: https://ssrn.com/abstract=1791565

Adriana Lojschova

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Ramon Gomez Salvador (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Thomas Westermann

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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