How Do Households Respond to Job Loss? Lessons from Multiple High-Frequency Data Sets
Publikation: Working paper › Forskning
How do households respond to job loss, and which self-insurance channels are most important? By linking customer data from the largest bank in Denmark with information from government administrative registers, we quantify a broad range of responses to job loss in a unified empirical framework. Two response margins stand out: during the first 24 months after job loss, households reduce spending by 30% of the income loss while reduced saving in liquid assets accounts for 50%. Other response margins highlighted in the literature - spousal labor supply, private transfers, home equity extraction, mortgage refinancing, and consumer credit - are less important.
|Status||Udgivet - 12 maj 2020|
|Navn||CEBI Working Paper Series|
- Household economics, unemployment, self-insurance, transaction data