On Intergenerational Immobility: Evidence that Adult Credit Health Reflects the Childhood Environment

59 Pages Posted: 3 Apr 2017 Last revised: 30 Nov 2017

See all articles by Sarena Goodman

Sarena Goodman

Board of Governors of the Federal Reserve System

Alice Henriques Volz

Board of Governors of the Federal Reserve System

Alvaro Mezza

Board of Governors of the Federal Reserve System

Date Written: March, 2017

Abstract

Using a novel dataset that links socioeconomic background to future credit, postsecondary education, and federal student loan and grant records, we document that, even though it is not and cannot be used by credit agencies in assigning risk, background is a strong predictor of adult credit health. A relationship remains upon inclusion of achievement, attainment, and debt management metrics. These findings reveal a new dimension along which childhood circumstances persist into adulthood and imply that the many important contexts in which credit scores are relied upon to evaluate individuals (e.g., lending, insurance, employment) may be helping to preserve inherited inequities.

JEL Classification: D12, D14, I22, I32, J10, J62

Suggested Citation

Goodman, Sarena and Henriques Volz, Alice and Mezza, Alvaro, On Intergenerational Immobility: Evidence that Adult Credit Health Reflects the Childhood Environment (March, 2017). FEDS Working Paper No. 2017-32, Available at SSRN: https://ssrn.com/abstract=2944932 or http://dx.doi.org/10.17016/FEDS.2017.032r1

Sarena Goodman (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Alice Henriques Volz

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Alvaro Mezza

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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