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Job displacement and financial outcomes

Daniel Aaronson, Sumit Agarwal, Julie Hotchkiss and Taylor Kelley

Economics Letters, 2019, vol. 177, issue C, 18-21

Abstract: Using two proprietary datasets on earnings and credit outcomes, this paper finds that both high- and low-earners take a significant and persistent hit to income after job displacement. But these losses only translate into worse credit conditions – higher credit card utilization, lower FICO scores, and a pick up in the rate of card accounts that are delinquent or over limit – among low- earners. We observe no negative implications among higher income households, providing novel empirical evidence of the economically disparate impact of job loss.

Keywords: Displacement; Credit constraints; Administrative data; Unemployment; Mass layoff (search for similar items in EconPapers)
JEL-codes: J65 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.econlet.2019.01.014

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