On Intergenerational Immobility: Evidence that Adult Credit Health Reflects the Childhood Environment

Sarena Goodman, Alice Henriques Volz and Alvaro Mezza
Additional contact information
Sarena Goodman: https://www.federalreserve.gov/econres/sarena-f-goodman.htm
Alice Henriques Volz: https://www.federalreserve.gov/econres/alice-henriques-volz.htm
Alvaro Mezza: https://www.federalreserve.gov/econres/alvaro-mezza.htm

No 2017-032, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Using a novel dataset that links socioeconomic background to future credit, postsecondary education, and federal student loan and grant records, we document that, even though it is not and cannot be used by credit agencies in assigning risk, background is a strong predictor of adult credit health. A relationship remains upon inclusion of achievement, attainment, and debt management metrics. These findings reveal a new dimension along which childhood circumstances persist into adulthood and imply that the many important contexts in which credit scores are relied upon to evaluate individuals (e.g., lending, insurance, employment) may be helping to preserve inherited inequities.

Keywords: Credit Health; Credit Scores; Intergenerational Mobility; Socioeconomic Status; Student Loans (search for similar items in EconPapers)
JEL-codes: D12 D14 I22 I32 J10 J62 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2017-03
New Economics Papers: this item is included in nep-edu, nep-lab and nep-rmg
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https://www.federalreserve.gov/econres/feds/files/2017032pap.pdf Original (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2017-32

DOI: 10.17016/FEDS.2017.032r1

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