Financial Distress among the Elderly: Bankruptcy Reform and the Financial Crisis
Published in Mitchell, O., and A. Lusardi (Eds.) (2020). Remaking Retirement: Debt in an Aging Economy. Oxford, UK: Oxford University Press.
Posted: 20 Feb 2020 Last revised: 30 Nov 2020
Date Written: May 2, 2019
Both the proportion of bankruptcy filings that are by the elderly and the proportion of foreclosure starts that affect the elderly have increased dramatically over the past twenty years — suggesting an increase in financial distress of the elderly relative to younger age groups. In this paper, we use new data to examine whether these trends can be explained by either of two events: the 2005 bankruptcy reform and the 2008 financial crisis. Our results show that while these events made both the elderly and younger age groups worse off, they do explain the increase in relative financial distress of the elderly.
Keywords: older adults, financial distress, foreclosure, bankruptcy, retirement
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