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The Distribution of Household Debt in the United States, 1950-2022

Author

Listed:
  • Alina Bartscher

    (Frankfurt School of Finance and Management)

  • Moritz Kuhn

    (University of Mannheim)

  • Moritz Schularick

    (IfW Kiel and Sciences Po)

  • Ulrike Steins

    (Evonauts GmbH)

Abstract

Using new household-level data, we study the secular increase in U.S. household debt and its distribution since 1950. Most of the debt were mortgages, which initially grew because more households borrowed. Yet after 1980, debt mostly grew because households borrowed more. We uncover home equity extraction, concentrated in the white middle class, as the largest cause, strongly affecting intergenerational inequality and life-cycle debt profiles. Remarkably, the additional debt did not lower households' net worth because of rising house prices. We conclude that asset-price-based borrowing became an integral part of households' consumption-saving decisions, yet at the cost of higher financial fragility. (Copyright: Elsevier)

Suggested Citation

  • Alina Bartscher & Moritz Kuhn & Moritz Schularick & Ulrike Steins, 2025. "The Distribution of Household Debt in the United States, 1950-2022," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 57, July.
    • Handle: RePEc:red:issued:24-152
    DOI: 10.1016/j.red.2025.101288
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    More about this item

    Keywords

    household debt; home equity extraction; inequality; household portfolios; financial fragility;
    All these keywords.

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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