EconPapers    
Economics at your fingertips  
 

Liquidity constraints and debts: Implications for the saving behavior of the middle class

Maude Toussaint‐Comeau

Contemporary Economic Policy, 2021, vol. 39, issue 3, 479-493

Abstract: Savings are essential for families to respond to risks against adverse financial shocks and reduce costs of uncertainties in the future. However, personal savings have been decreasing among US households. This study analyzes the determinants of liquidity constraints and savings for the relatively understudied middle class. The study finds evidence of substantial liquidity constraints—Eighty percent of households in the middle class are liquidity constrained. Furthermore, the results suggest that high‐debt payments and high‐interest‐rate credit cards amplify the effects of liquidity tightness and hinder savings for children's education, a first‐home purchase, or later‐on‐in‐life medical spending.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/coep.12521

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:bla:coecpo:v:39:y:2021:i:3:p:479-493

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1074-3529

Access Statistics for this article

Contemporary Economic Policy is currently edited by Brad R. Humphreys

More articles in Contemporary Economic Policy from Western Economic Association International Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2021-06-26
Handle: RePEc:bla:coecpo:v:39:y:2021:i:3:p:479-493