The Increase in Payday Loans and Damaged Credit after the Great Recession

Jonghee Lee () and Kyoung Tae Kim ()
Additional contact information
Jonghee Lee: Keimyung University
Kyoung Tae Kim: The University of Alabama

Journal of Family and Economic Issues, 2018, vol. 39, issue 2, No 14, 360-369

Abstract: Abstract The proportion of US households that used a high-cost credit product, payday loans, almost doubled between 2007 and 2013. In this study, we estimated the effect of credit constraints on the likelihood of using payday loans. Based on a logistic regression of data from the 2007–2013 Survey of Consumer Finances (SCF), we found that households with credit constraints were more likely to use payday loans than were those that did not experience such constraints, and that the effect was greater after the Great Recession. Over the survey years, having an emergency expense was the most important reason given for using a payday loan, but the rate at which other reasons were given varied over time. Paying bills/loans and having no other credit options were both reasons given more frequently following the Great Recession than in 2007.

Keywords: Payday loans; Credit constraints; Great recession; Survey of consumer finances (search for similar items in EconPapers)
JEL-codes: D12 D14 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10834-017-9557-0 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:jfamec:v:39:y:2018:i:2:d:10.1007_s10834-017-9557-0

Ordering information: This journal article can be ordered from
http://www.springer. ... es/journal/10834/PS2

DOI: 10.1007/s10834-017-9557-0

Access Statistics for this article

Journal of Family and Economic Issues is currently edited by Joyce Serido

More articles in Journal of Family and Economic Issues from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().