The Household Bankruptcy Decision

Information technology and the rise of household bankruptcy

“…13 Except three short periods of 1992-94, 1997-2000 and 2003-04, bankruptcy filings have been increasing. From 1994 to 1997 bankruptcy filings increased by 63% during a period of robust economic expansion.…”

“…12 See Li and Sarte [17] for an elaborated study of bankruptcy filers' choice of chapter. 13 The percentage of filers for the 1984-95 period are reported from Fay et al [13]. The number of filings for the 1995-2005 period are from www.uscourts.gov and the number of households for this period are from www.census.gov.…”

“…Gross and Souleles [14] report that ceteris paribus, a credit card holder in 1997 was almost 1 percentage point more likely to declare bankruptcy than a card holder with identical risk characteristics in 1995. Fay, Hurst and White [13] report that even after controlling for state and time fixed effects, households are more likely to file for bankruptcy if they live in districts with higher aggregate bankruptcy filings rates.…”

Consumption inequality and partial insurance

“…There is scattered evidence on the role played by such devices on household consumption. Theoretical and empirical research have analyzed the role of extended family networks [Kotlikoff and Spivak, 1981; Attanasio and Rios-Rull, 2000], added worker effects [Stephens, 2002], the timing of durable purchases [Browning and Crossley, 2003], progressive income taxation [Mankiw andKimball, 1992, Auerbach andFeenberg, 2001, and Kniesner and Ziliak, 2002], personal bankruptcy laws [Fay, Hurst and White, 2002], insurance within the firm [Guiso, Pistaferri and Schivardi, 2003], and the role of government public policy programs, such as unemployment insurance [Engen and Gruber, 2001], Medicaid [Gruber and Yelowitz, 1999], AFDC [Gruber, 2000], and food stamps [Blundell and Pistaferri, 2003]. While we do not take a precise stand on the mechanisms (other than savings) that are available to smooth idiosyncratic shocks to income, we emphasize that our evidence can be used to uncover whether some of these mechanisms are actually at work, how important they are quantitatively, and how they differ across households and over time.…”

Critical life events and private over-indebtedness

“…Die größte Bedeutung als Auslöser von Überschuldungskarrieren wird der Arbeitslosigkeit bescheinigt (Holzscheck et al 1982;Backert und Lechner 2000;Angele et al 2008). Dieser Grund wurde etwa in einer Studie von Holzscheck et al (1982) von 58 % der Befragten genannt, und auch in der Untersuchung von Angele et al (2008) (Fay et al 2002;Duygan-Bump und Grant 2009 (Reiter 1991;Duhaime 2001;Korczak 2003). Kritischen Ereignissen kommt demnach eher eine Katalysatorfunktion zu.…”