US and European Household Debt and Credit Constraints

Jonathan Crook () and Stefan Hochguertel ()
Additional contact information
Jonathan Crook: University of Edinburgh
Stefan Hochguertel: VU University Amsterdam

No 07-087/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper uses micro data from four OECD countries (the United States, Spain, Italy, and the Netherlands), to assess the determinants of household debt holding and to investigate whether or not credit constraints are important for household debt holding. We extend the existing literature in important ways. First, we present comparative evidence for four countries at the micro level, where we rely on household panel data for two countries; we are thus able to control for unobserved heterogeneity via individual household effects and to track changes in household behaviour over time. Second, by making data across countries as comparable as possible, we can explore the importance of the differences in institutional settings for debt incidence, debt outstanding and credit constraints. We also explore the implications for debt holding from consumption models, including a numerically solved precautionary savings model. We find that inter-country differences are substantial and remain even after controlling for a host of observable characteristics. This points to institutional differences between the countries being important.

Keywords: debt and credit; borrowing constraints; permanent income; panel data; international comparison. (search for similar items in EconPapers)
JEL-codes: C33 D12 D14 D91 G21 O57 (search for similar items in EconPapers)
Date: 2007-11-13
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
https://papers.tinbergen.nl/07087.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20070087

Access Statistics for this paper

More papers in Tinbergen Institute Discussion Papers from Tinbergen Institute Contact information at EDIRC.
Bibliographic data for series maintained by Tinbergen Office +31 (0)10-4088900 ().