Consumption, Credit, and the Missing Young

Posted: 27 Nov 2019

See all articles by Daniel Cooper

Daniel Cooper

Federal Reserve Bank of Boston

Olga Gorbachev

University of Delaware - Economics

María José Luengo‐Prado

Federal Reserve Banks - Federal Reserve Bank of Boston

Date Written: 2019-10-01

Abstract

There are more young adults today with either no credit history or insufficient credit history to be scored by one of the major credit bureaus than there were before the Great Recession -- a reality that is likely an unintended outcome of the CARD Act of 2009. In regressions that include a rich set of controls, this paper shows that measures of young adults missing from credit bureau data act as a drag on state-level consumption growth. This finding seems to be driven by young individuals from more disadvantaged backgrounds having less access to credit since the act went into effect.

Keywords: consumption, credit

JEL Classification: D12, E21

Suggested Citation

Cooper, Daniel H. and Gorbachev, Olga and Luengo-Prado, Maria Jose, Consumption, Credit, and the Missing Young (2019-10-01). FRB of Boston Working Paper No. 19-10. Available at SSRN: https://ssrn.com/abstract=3493485 or http://dx.doi.org/10.29412/res.wp.2019.10

Daniel H. Cooper (Contact Author)

Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States
617-973-4220 (Phone)

Olga Gorbachev

University of Delaware - Economics ( email )

Newark, DE 19716
United States

Maria Jose Luengo-Prado

Federal Reserve Banks - Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

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