Job Displacement and Financial Outcomes
9 Pages Posted: 6 Jan 2019
Date Written: November 1, 2018
Using two proprietary datasets on earnings and credit outcomes, this paper finds that both high- and low-earners take a significant and persistent hit to income after job displacement. But these losses only translate into worse credit conditions — higher credit card utilization, lower FICO scores, and a pick up in the rate of card accounts that are delinquent or over limit — among low-earners. We observe no negative implications among higher income households, providing novel empirical evidence of the economically disparate impact of job loss.
Keywords: displacement, credit constraints, administrative data, unemployment, mass layoff
JEL Classification: J65
Suggested Citation: Suggested Citation