IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Has Growing Inequality Contributed to Rising Household Economic Distress?

Listed author(s):
  • Heather Boushey
  • Christian Weller

The personal bankruptcy rate increased more than fourfold in the last quarter century. Other measures of economic distress, particularly foreclosure and credit default rates, also increased sharply. A possible explanation for this is greater household indebtedness. Household debt relative to income, however, did not even double over the same period, suggesting that the aggregate increase in household economic distress was disproportionate to the rise in household debt. We consider if the simultaneous increase in income inequality has contributed to the rise in household economic distress, Specifically, we hypothesize that greater inequality led to a larger expansion of credit, especially in the form of credit card debt, among low and moderate income households than among higher income ones. This expansion of disproportionately more expensive credit may have contributed to the growth in household economic distress. Based on data from 1980 to 2004, we find robust evidence for a link between inequality and credit card debt and between credit card debt and economic distress.

If 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.

File URL:
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Taylor & Francis Journals in its journal Review of Political Economy.

Volume (Year): 20 (2008)
Issue (Month): 1 ()
Pages: 1-22

in new window

Handle: RePEc:taf:revpoe:v:20:y:2008:i:1:p:1-22
DOI: 10.1080/09538250701661764
Contact details of provider: Web page:

Order Information: Web:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:taf:revpoe:v:20:y:2008:i:1:p:1-22. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.