Income Inequality, Debt Burden and COVID-19
71 Pages Posted: 5 Jul 2020 Last revised: 2 Sep 2021
Date Written: July 2021
There have been stark differences in the ability of low-income and high-income individuals to protect themselves during the COVID-19 pandemic. Using a triple difference specification, we document that debt burdens contribute to this inequity by disproportionately increasing the cost to low-income individuals of reducing their mobility after the start of the pandemic. This effect is stronger in counties located in states with residential mortgage recourse. Furthermore, the debt burden channel is exacerbated for Black/African-American and Hispanic/Latino borrowers. Additionally, we provide suggestive evidence that this debt burden channel could have contributed to 2.71% more COVID-19 cases.
Keywords: debt burden, inequality, mobility, coronavirus, COVID-19, pandemics
JEL Classification: D63, E64, G51, I14, J15
Suggested Citation: Suggested Citation