Dual Credit Markets: Income Risk, Household Debt, and Consumption

David A. Matsa, Brian Melzer and Michal Zator

No 32858, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many young employees work on a temporary basis, which entails significantly greater income risk than “permanent” work, even for jobs in the same occupation and at a similar wage. We find that this income uncertainty leads lenders to ration credit to temporary workers, precisely at the stage of life when permanent workers rely on mortgages to invest in housing and loans to smooth consumption and purchase durable goods. Labor laws that improve job security for permanent workers create a dual credit market alongside the dual labor market, making it harder for young adults to establish financial independence and new families.

JEL-codes: D14 G51 J41 J68 R21 (search for similar items in EconPapers)
Date: 2024-08
New Economics Papers: this item is included in nep-fdg, nep-iue and nep-lab
Note: CF LS
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w32858.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

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:nbr:nberwo:32858

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w32858
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().