US and European Household Debt and Credit Constraints

Arbeitspapier

This paper uses micro data from four OECD countries (the United States, Spain, Italy, and the Netherlands), to assess the determinants of household debt holding and to investigate whether or not credit constraints are important for household debt holding. We extend the existing literature in important ways. First, we present comparative evidence for four countries at the micro level, where we rely on household panel data for two countries; we are thus able to control for unobserved heterogeneity via individual household effects and to track changes in household behaviour over time. Second, by making data across countries as comparable as possible, we can explore the importance of the differences in institutional settings for debt incidence, debt outstanding and credit constraints. We also explore the implications for debt holding from consumption models, including a numerically solved precautionary savings model. We find that inter-country differences are substantial and remain even after controlling for a host of observable characteristics. This points to institutional differences between the countries being important.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 07-087/3

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models ; Consumer Economics: Empirical Analysis ; Household Saving; Personal Finance ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Comparative Studies of Countries
• Subject: debt and credit ; borrowing constraints ; permanent income ; panel data ; international comparison. ; Private Verschuldung ; Liquiditätsbeschränkung ; USA ; Spanien ; Italien ; Niederlande

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Crook, Jonathan ; Hochguertel, Stefan
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/86233
• Last update: 10.03.2025, 11:43 AM CET