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Household sector borrowing in the euro area - a micro data perspective

Author

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  • Adalid, Ramón
  • Lojschová, Adriana
  • Westermann, Thomas

Abstract

This paper uses micro data from the European Union Statistics on Income and Living Conditions (EU-SILC) to generate structural information for the euro area on the incidence of household indebtedness and the debt service burden. It breaks down incidence by characteristics such as income, age and employment status, all features that can be cross-referenced in the light of theories such as the life-cycle hypothesis. Overall, income appears to be the dominant feature determining the debt status of a household. The paper also examines the evolution of indebtedness and debt service burdens over time and compares the situation in the euro area with that in the United States. In general, the results suggest that the macroeconomic implications of indebtedness for monetary transmission and financial stability are not associated with the mean but with the tails of the distribution. JEL Classification: C32, G14

Suggested Citation

  • Adalid, Ramón & Lojschová, Adriana & Westermann, Thomas, 2011. "Household sector borrowing in the euro area - a micro data perspective," Occasional Paper Series 125, European Central Bank.
  • Handle: RePEc:ecb:ecbops:20110125
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    File URL: http://www.ecb.europa.eu/pub/pdf/scpops/ecbocp125.pdf
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    References listed on IDEAS

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    1. Oecd, 2006. "Improving Financial Literacy: Analysis of Issues and Policies," Financial Market Trends, OECD Publishing, pages 111-123.
    2. Georgarakos, Dimitris & Lojschova, Adriana & Ward-Warmedinger, Melanie E., 2009. "Mortgage Indebtedness and Household Financial Distress," IZA Discussion Papers 4631, Institute for the Study of Labor (IZA).
    3. Pierre-Olivier Gourinchas & Jonathan A. Parker, 2002. "Consumption Over the Life Cycle," Econometrica, Econometric Society, vol. 70(1), pages 47-89, January.
    4. Dániel Holló, 2007. "Household indebtedness and financial stability: Reasons to be afraid?," MNB Bulletin (discontinued), Magyar Nemzeti Bank (Central Bank of Hungary), pages 23-30.
    5. George T. Simigiannis & Panagiota G. Tzamourani, 2007. "Borrowing and socio-economic characteristics of households: results of sample surveys carried out by the Bank of Greece," Economic Bulletin, Bank of Greece, issue 28, pages 31-50, February.
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    Cited by:

    1. repec:eee:quaeco:v:64:y:2017:i:c:p:171-182 is not listed on IDEAS
    2. Ozlem Albayrak & Thomas Masterson, 2017. "Quality of Statistical Match of Household Budget Survey and SILC for Turkey," Economics Working Paper Archive wp_885, Levy Economics Institute.
    3. Petra Gerlach-Kristen & Seán Lyons, 2015. "Mortgage arrears in Europe: The impact of monetary and macroprudential policies," Working Papers 2015-05, Swiss National Bank.
    4. Piotr Bialowolski & Dorota Weziak-Bialowolska, 2014. "The Index of Household Financial Condition, Combining Subjective and Objective Indicators: An Appraisal of Italian Households," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(1), pages 365-385, August.
    5. Merike Kukk, 2014. "Distinguishing the Components of Household Financial Wealth: the Impact of Liabilities on Assets in Euro Area Countries," Proceedings of International Academic Conferences 0100418, International Institute of Social and Economic Sciences.
    6. David ARISTEI & Manuela Gallo, 2012. "The Drivers of Household Over-Indebtedness and Delinquency on Mortgage Loans: Evidence from Italian Microdata," Quaderni del Dipartimento di Economia, Finanza e Statistica 105/2012, Università di Perugia, Dipartimento Economia.

    More about this item

    Keywords

    financial vulnerability; household indebtedness; Micro Survey Data; monetary transmission;

    JEL classification:

    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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