Household Debt and Saving During the 2007 Recession
Using administrative credit report records and data collected through several special household surveys we analyze changes in household debt and savings during the 2007 recession. We find that while different segments of the population were affected in distinct ways, depending on whether they owned a home, whether they owned stocks and whether they had secure jobs, the crisis' impact appears to have been widespread, affecting large shares of households across all age, income and education groups. In response to their deteriorated financial situation, households reduced their average spending and increased saving. The latter increase - at least in 2009 - did not materialize itself through an increase in contributions to retirement and savings accounts. If anything, such contributions actually declined on average during that year. Instead, the higher saving rate appears to reflect a considerable decline in household debt, with households paying down mortgage debt in particular. At the end of 2009 individuals expected to continue to increase saving and pay down debt, which is consistent with what we have observed so far in 2010. In contrast, consumers were pessimistic about the availability of credit, with credit expected to become harder to obtain during 2010.
|Date of creation:||Apr 2011|
|Publication status:||published as Household Debt and Saving during the 2007 Recession , Rajashri Chakrabarti, Donghoon Lee, Wilbert van der Klaauw, Basit Zafar. in Measuring Wealth and Financial Intermediation and Their Links to the Real Economy , Hulten and Reinsdorf. 2015|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wändi Bruine de Bruin & Simon M. Potter & Robert W. Rich & Giorgio Topa & Wilbert Van der Klaauw, 2010. "Improving survey measures of household inflation expectations," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 16(Aug/Sep).
- Meta Brown & Andrew F. Haughwout & Donghoon Lee & Wilbert Van der Klaauw, 2013.
"The financial crisis at the kitchen table: trends in household debt and credit,"
Current Issues in Economics and Finance,
Federal Reserve Bank of New York, vol. 19(April).
- Meta Brown & Andrew F. Haughwout & Donghoon Lee & Wilbert Van der Klaauw, 2010. "The financial crisis at the kitchen table: trends in household debt and credit," Staff Reports 480, Federal Reserve Bank of New York.
- Andrew F. Haughwout & Richard Peach & Joseph Tracy, 2010. "The homeownership gap," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 16(May).
- Andrew F. Haughwout & Richard Peach & Joseph Tracy, 2009. "The homeownership gap," Staff Reports 418, Federal Reserve Bank of New York.
- Donghoon Lee & Wilbert Van der Klaauw, 2010. "An introduction to the FRBNY Consumer Credit Panel," Staff Reports 479, Federal Reserve Bank of New York. Full references (including those not matched with items on IDEAS)