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Wage Garnishment in the United States: New Facts from Administrative Payroll Records

Author

Listed:
  • Anthony A. DeFusco
  • Brandon M. Enriquez
  • Margaret B. Yellen

Abstract

Wage garnishment allows creditors to deduct money directly from workers’ paychecks to re-pay defaulted debts. We document new facts about wage garnishment between 2014–2019 using data from a large payroll processor who distributes paychecks to approximately 20%of U.S. private-sector workers. As of 2019, over one in every 100 workers was being garnished for delinquent debt. The average garnished worker experiences garnishment for five months, during which approximately 11% of gross earnings is remitted to their creditor(s). The beginning of a new garnishment is associated with an increase in job turnover rates but no intensive margin change in hours worked.

Suggested Citation

  • Anthony A. DeFusco & Brandon M. Enriquez & Margaret B. Yellen, 2022. "Wage Garnishment in the United States: New Facts from Administrative Payroll Records," NBER Working Papers 30724, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30724
    Note: CF LE LS
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    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G5 - Financial Economics - - Household Finance
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • K35 - Law and Economics - - Other Substantive Areas of Law - - - Personal Bankruptcy Law

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