Household debt and financial vulnerability: empirical evidence for Spain, 2002–2020

Juan Ignacio Martín-Legendre () and José Manuel Sánchez-Santos ()
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Juan Ignacio Martín-Legendre: University of A Coruna
José Manuel Sánchez-Santos: University of A Coruna

Empirica, 2024, vol. 51, issue 3, No 5, 703-730

Abstract: Abstract The aim of this paper is to analyse the evolution of Spanish households’ indebtedness and financial vulnerability over the course of this century using micro-data from the Household Finance and Consumption Survey. Our results show a growing debt participation of Spanish households and an increase in the stock of outstanding debt of indebted households, a trend that reversed with the end of the Great Recession. Moreover, the percentage of financially vulnerable households according to three indicators grew dramatically until the end of the downward phase of the last economic cycle and showed considerable signs of improvement during the second half of 2010s. These results, nonetheless, call attention to the number of Spanish households being unable to service their debts in the face of an economic downturn.

Keywords: Financial instability hypothesis; Financial vulnerability; Household debt; Inequality; Survey data (search for similar items in EconPapers)
JEL-codes: D14 E21 G20 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10663-024-09617-z

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