Poverty Levels and Debt Indicators Among Low-Income Households Before and After the Great Recession
financial status and behavior, general population, financial well-being barriers, economic events, debt, income, family, poverty, recession, low-income
This study analyzed the debt profile of low-income households before and after the Great Recession using the 2007-2013 Survey of Consumer Finances. We utilized Heckman selection models to investigate three debt characteristics; (1) the amount of debt, (2) debt-to-income ratio, and (3) debt delinquency. Before and after the Great Recession, results from the selection stage showed the probability of holding debt for households increased as their income level increased (moving into less severe poverty categories); results from the outcome stage indicated households in the most severe poverty category (below 100% of poverty threshold) were less likely to meet debt-to-income ratio guidelines. Following the Great Recession these lowest-income households were more likely to have higher debt and debt delinquency problems.
Kim, Kyoung Tae; Wilmarth, Melissa J.; and Henager, Robin, "Poverty Levels and Debt Indicators Among Low-Income Households Before and After the Great Recession" (2017). Financial Education Delivery. 7.