Severe Health Shocks and Financial Well-Being

Kaveh Majlesi, Elin Molin and Paula Roth

CINCH Working Paper Series (since 2020) from Duisburg-Essen University Library, DuEPublico

Abstract: We examine the effect of fatal and nonfatal health shocks on household debt defaults. Fatal shocks significantly cause defaults, especially among surviving spouses lacking sufficient resources, namely housing wealth. Our findings suggest that this behavior is not due to inattention. These shocks also have intergenerational consequences, as children of resource-poor surviving spouses become more likely to face debt collection. These findings in a country with a relatively generous welfare system manifest the graveness of background risks among poorer households and suggest the potential for improving social insurance programs. Nonfatal health shocks lead to an immediate but temporary increase in default likelihood.

Keywords: financial distress; health shocks; household debt; household saving; JEL classification: I12; G51; G22 (search for similar items in EconPapers)
Date: 2024-10-08
New Economics Papers: this item is included in nep-ban and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://duepublico2.uni-due.de/servlets/MCRFileNod ... H_Series_2024_02.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:ajt:wcinch:82497

DOI: 10.17185/duepublico/82497

Access Statistics for this paper

More papers in CINCH Working Paper Series (since 2020) from Duisburg-Essen University Library, DuEPublico Contact information at EDIRC.
Bibliographic data for series maintained by DuEPublico ( this e-mail address is bad, please contact ).