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Has the Rise in Debt Made Households More Vulnerable?

  • Nathalie Girouard
  • Mike Kennedy
  • Christophe André

This paper reviews, for a number of OECD economies, macroeconomic developments in household balance sheets over the past two decades. The main findings show that the rise in household debt to historical levels has been driven by a combination of favourable financial conditions and buoyant housing markets. There have also been a number of supply-side innovations in credit markets that have eased the access to credit for lower income borrowers and reduced financial constraints for first-time homebuyers. Total household net wealth has risen and provided households with a financial cushion against a negative shock. That said, households in a number of countries have leveraged balance sheets and the sensitivity to house price and interest rate developments has likely increased. The paper then examines micro level information which suggests that most of the debt is held by households better able to manage it. In particular, the major part of debt is held by higher-income households, who also spend a smaller proportion of their disposable income servicing debts. Lower-income households, with less ability to service debt, do not hold that much and, as such, the spill over effects from this group to the rest of the economy are perhaps not large. Whether the situation remains benign or not is discussed in the final section of the paper. Estimates presented point to significant effects of changes in net wealth on household saving rates in a large number of the countries studied. Les ménages sont-ils plus vulnérables du fait de leur endettement croissant? Cette étude examine pour un certain nombre de pays de l’OCDE, l’évolution macroéconomique des bilans des ménages depuis deux décennies. Le fait que l’endettement des ménages, en particulier sous la forme d’emprunts hypothécaires atteigne des niveaux records dans plusieurs pays tient à des conditions financières favorables et au dynamisme du marché du logement. En outre, un certain nombre d’innovations sont apparues du côté de l’offre sur le marché du crédit et ont facilité l’emprunt pour les titulaires de bas revenus tout en allégeant les contraintes financières pour les primo-acquéreurs. De plus, le patrimoine net des ménages a aussi cru et permet de protéger financièrement les ménages en cas de choc négatif. Cela étant, l’effet de levier des ménages semblent important dans plusieurs pays et la sensibilité à l’évolution des prix des logements et des taux d’intérêt s’est probablement accentuée. L'étude analyse ensuite des informations microéconomiques et montrent que la majeure partie de l’endettement est le fait des ménages les mieux à même de le gérer. En particulier, la dette a été surtout contractée par les ménages à revenu élevé, qui affectent une plus faible proportion de leur revenu disponible au service de leur dette. Les ménages à bas revenu, dont la capacité de service de la dette est moindre, ne représentent pas une aussi forte proportion de l’endettement, de sorte que l’impact de la situation de cette catégorie sur le reste de l’économie n’est sans doute pas très marqué. Les conséquences de ce phénomène sont discutées dans la dernière partie de cette étude. Les estimations suggèrent des effets de richesse important sur le taux d'épargne des ménages dans plusieurs pays.

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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 535.

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Date of creation: 13 Dec 2006
Date of revision:
Handle: RePEc:oec:ecoaaa:535-en
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