How Do Households Respond to Job Loss? Lessons from Multiple High-Frequency Data Sets

Claus Kreiner, Asger Lau Andersen, Amalie Jensen, Niels Johannesen and Adam Sheridan
Authors registered in the RePEc Author Service: Søren Leth-Petersen

No 16131, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: How do households respond to job loss, and which self-insurance channels are most important? By linking high-frequency customer data from the largest bank in Denmark with government administrative registers, we quantify a broad range of responses to job loss in a unified empirical framework. Two responses stand out: during the first 24 months after job loss, reductions in household spending account for 30% of the income loss, while lower saving in liquid assets accounts for 50%. Other response margins highlighted in the literature - spousal labor supply, private transfers, home equity extraction, mortgage refinancing, and consumer credit - are less important.

Keywords: Cost of unemployment; Social insurance (search for similar items in EconPapers)
Date: 2021-05
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Related works:
Journal Article: How Do Households Respond to Job Loss? Lessons from Multiple High-Frequency Datasets (2023)
Working Paper: How Do Households Respond to Job Loss? Lessons from Multiple High-Frequency Data Sets (2020)
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