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Consumption, Credit, and the Missing Young

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  • DANIEL COOPER
  • OLGA GORBACHEV
  • MARÍA JOSÉ LUENGO‐PRADO

Abstract

There are more young adults today with either no credit history or insufficient credit history to be scored by one of the major credit bureaus than there were before the Great Recession—a reality that is likely an outcome of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009–10. In regressions that include a rich set of controls, we show that measures of young adults missing a credit score in credit bureau data act as a drag on state‐level consumption growth. We demonstrate that this effect is driven by young people's loss of access to credit since the legislation went into effect.

Suggested Citation

  • Daniel Cooper & Olga Gorbachev & María José Luengo‐Prado, 2023. "Consumption, Credit, and the Missing Young," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 55(2-3), pages 379-405, March.
    • Handle: RePEc:wly:jmoncb:v:55:y:2023:i:2-3:p:379-405
    DOI: 10.1111/jmcb.12973
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    References listed on IDEAS

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    Cited by:

    1. Stefania Albanesi & Rania Gihleb & Ning Zhang, 2022. "Boomerang College Kids: Unemployment, Job Mismatch and Coresidence," Working Papers 2022-038, Human Capital and Economic Opportunity Working Group.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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