On Intergenerational Immobility: Evidence That Adult Credit Health Reflects the Childhood Environment

Goodman, Sarena; Mezza, Alvaro; Volz, Alice Henriques

doi:10.1111/ecin.12862

Cited by 4 publications

(1 citation statement)

References 76 publications

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“…Auto loan originations for 18-to 29-year-olds fully recovered to prerecession levels following the Great Recession, while mortgage originations did not. Goodman, Mezza, and Volz (2020) documents an important link between socioeconomic conditions and credit records for college educated young adults, lending support to the validity of our instrument.…”

Section: Toward a Causal Interpretation Of The Consumption Growth Res...mentioning

confidence: 55%

Consumption, Credit, and the Missing Young

Cooper¹,

Gorbachev²,

Luengo‐Prado³

2022

J of Money Credit Banking

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There are more young adults today with either no credit history or insufficient credit history to be scored by one of the major credit bureaus than there were before the Great Recession-a reality that is likely an unintended outcome of the CARD Act of 2009. In regressions that include a rich set of controls, this paper shows that measures of young adults missing from credit bureau data act as a drag on state-level consumption growth. This finding seems to be driven by young individuals from more disadvantaged backgrounds having less access to credit since the act went into effect.

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Section: Toward a Causal Interpretation Of The Consumption Growth Res...mentioning

confidence: 55%

Consumption, Credit, and the Missing Young

Cooper¹,

Gorbachev²,

Luengo‐Prado³

2022

J of Money Credit Banking

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Student Loans, Access to Credit, and Consumer Credit Demand

Mezza,

Ringo,

Sommer

2024

The Review of Financial Studies

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This paper provides novel evidence that increased student loan debts, caused by rising tuitions, increase borrowers’ demand for additional consumer debt, while simultaneously restricting their ability to access it. The net effect of student loan debt on consumer borrowing varies by market, depending on whether the supply or demand channel dominates. In loosely underwritten credit markets, increased student loan debt causes borrowing to increase, while in tightly underwritten markets, increased student loan debt reduces credit use. These findings match predictions of a standard life cycle model of household consumption and borrowing, augmented by a realistic student loan repayment contract. (JEL G51, D15, I22, D14)

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What accounts for racial and ethnic differences in credit use?

Goodstein

Lloro

Rhine

et al. 2021

Journal of Consumer Affairs

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Racial and ethnic differences across U.S. households in use of bank credit (e.g., credit cards) and nonbank credit (e.g., payday loans) are striking. We examine whether household characteristics and residential location can explain these differences. We use a novel dataset with information on previously unexplored factors, including income volatility, subjective attitudes about banks, geographic proximity to financial providers, and neighborhood population characteristics. We find that much of the raw disparities in credit use are attributable to observable household characteristics. Accounting for neighborhood population characteristics meaningfully reduces the disparities further. However, the residual racial and ethnic disparities remain large in magnitude. We show these disparities are not likely attributable to unobserved differences in households' family background, financial literacy, subjective attitudes, or credit scores. Instead, they are most likely attributable to unobserved supply‐side factors, such as racial and ethnic differences in households' exposure to marketing. We conclude with implications for policy.

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On Intergenerational Immobility: Evidence That Adult Credit Health Reflects the Childhood Environment

Cited by 4 publications

References 76 publications

Consumption, Credit, and the Missing Young

Consumption, Credit, and the Missing Young

Student Loans, Access to Credit, and Consumer Credit Demand

What accounts for racial and ethnic differences in credit use?

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