Working Papers
Unemployment Insurance Exhaustion and Household Debt Repayment
with Meta Brown
This paper studies the dynamic debt repayment behavior of workers as they move through time-limited spells of Unemployment Insurance (UI) benefit receipt. Using an event-study research design, we examine the extent to which unemployed workers manage to remain current on their debt repayment, fall delinquent (retaining debt payments to support consumption), or file for bankruptcy as they move through the initial shock of job loss and UI benefit initiation, the ongoing unemployment spell, and the eventual exhaustion of UI benefits. Using newly linked administrative UI benefit, wage, and credit data on Ohioan workers drawn from the Ohio Longitudinal Data Archive (OLDA) and the OSU Consumer Credit Panel (OSU-CCP), we find an immediate increase in delinquency on revolving debt after displacement, suggesting that workers support consumption during early unemployment by choosing to delay their debt repayment. We also find that bankruptcies escalate dramatically at benefit exhaustion—more than quadruple the modest increase at initial job loss. Beneath these aggregates, we find distinct heterogeneity in repayment behavior by workers' pre-displacement economic circumstances. First, across all income groups, displaced households with limited debt burden generally rely on delinquency rather than bankruptcy. Second, highly indebted, low-income households show an immediate rise in bankruptcy beginning in the quarter of job loss (i.e., UI claiming). Their likelihood of filing for bankruptcy is approximately 3.3 percentage points higher than that of low debt, low-income households around the time of job loss, and this gap increases to 5.6 percentage points by the time of exhaustion. Third, highly indebted, high-income households tend to rely on delinquency rather than bankruptcy throughout the unemployment spell. These repayment patterns suggest that UI benefits, combined with missed payments on revolving credit, enable overall displaced households to postpone filing for bankruptcy. However, this postponement unravels as bankruptcy rate rises sharply for those who remain unemployed at benefit exhaustion. Disadvantaged households are unable to delay filing for bankruptcy even with UI benefits, while higher-income households are capable of managing liquidity shortfalls by resorting to delinquency.
Homeownership Affordability, Marriage, and Fertility: Evidence from Korea
This paper examines how tighter home affordability affects marriage timing and fertility decisions, especially among young renters facing barriers to home purchase.
Work in Progress
The Effect of Interest Rates on Innovation