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Measuring Over-Indebtedness and Asset Leveraging Using the FGT Poverty Framework: Evidence for Belgium

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  • Sarah Kuypers

    (University of Antwerp)

  • Gerlinde Verbist

    (University of Antwerp)

Abstract

Household debt has increased significantly since the second half of the 20th century, making it one of the cornerstones of household finances. It is, however, necessary to monitor that indebtedness does not spiral out of control, as it can have negative consequences both at the micro and macro level. We propose new measures of over-indebtedness based on the poverty framework, while also taking into account asset leverage. We illustrate these measures for the case study of Belgium, using data from the Eurosystem Household Finance and Consumption Survey. While the level of over-indebtedness is relatively similar to other commonly used indicators, we show that our indicators have some important advantages. They are able to capture different socio-demographic groups with a high risk of over-indebtedness and they also point towards the important role of non-mortgage debt and low resources (income and assets) rather than high levels of debt as such.

Suggested Citation

  • Sarah Kuypers & Gerlinde Verbist, 2025. "Measuring Over-Indebtedness and Asset Leveraging Using the FGT Poverty Framework: Evidence for Belgium," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 179(3), pages 1563-1585, September.
    • Handle: RePEc:spr:soinre:v:179:y:2025:i:3:d:10.1007_s11205-025-03677-9
    DOI: 10.1007/s11205-025-03677-9
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    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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