Household Debt, Assets, and Income in Canada: A Microdata Study
AbstractThe authors use microdata from the 1999 and 2005 Surveys of Financial Security to identify changes in household debt, and discuss their potential implications for monetary policy and financial stability. They document an increase in the debt-income ratio, which rose from 0.75 to 0.95, on average. Rising debt ratios were driven by a 50 per cent increase in mortgage balances among the middle-aged, a doubling of credit card debt among households over 55, and a fourfold increase in home equity lines of credit among small business owners and households without high school diplomas. The authors identify rising debt-income ratios among households in the bottom income quintile as the most important development of the years 1999 through 2005, signalling greater sensitivity to rising interest rates or negative income shocks -- particularly among income-poor homeowners, whose 2005 mortgage obligations totalled 72 per cent of income. Meanwhile, an increase in the portfolio share for which real estate accounts, particularly among the middleaged, suggests that household balance sheets have become more sensitive to changes in the housing market. In addition to poor households, the authors identify former bankrupts, younger households, and the self-employed as more indebted and hence at greater risk.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Bank of Canada in its series Discussion Papers with number 09-7.
Length: 37 pages
Date of creation: 2009
Date of revision:
Contact details of provider:
Postal: 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada
Phone: 613 782-8845
Fax: 613 782-8874
Web page: http://www.bank-banque-canada.ca/
Credit and credit aggregates; Sectoral balance sheet; Productivity; Financial stability;
Find related papers by JEL classification:
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Césaire Meh & Yaz Terajima, 2008. "Inflation, Nominal Portfolios, and Wealth Redistribution in Canada," Working Papers 08-19, Bank of Canada.
- Wendy M. Edelberg & Jonas D.M. Fisher, 1997. "Household debt," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Nov.
- Maxime Desmarais-Tremblay & François Vaillancourt, 2011. "Le bilan des particuliers au Canada : évolution et analyse," CIRANO Project Reports 2011rp-17, CIRANO.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.