Household Debt and Union Jobs: Evidence from Bankruptcy Reform

Po Yin Wong, Giorgos Gouzoulis and Giorgos Galanis

No PKWP2618, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: This paper examines how household indebtedness shapes union participation in the United States, using PSID data (1999–2021) and the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act as a natural experiment: households above their state median income lost access to Chapter 7 bankruptcy, raising the cost of consumer debt. Treated households deleveraged, and their union participation fell on the margin made financially meaningful by state labor law: entry into union-covered jobs in non-Right-to-Work states, and retention of formal membership in Right-to-Work states. Our findings show that personal balance sheets and labor law jointly shape workers' collective representation.

Keywords: Unionization; Union Jobs; Personal Debt; Bankruptcy Reform; Right to Work (search for similar items in EconPapers)
JEL-codes: J50 J51 K35 (search for similar items in EconPapers)
Pages: 23
Date: 2026-07
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