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

22 Pages Posted: 14 May 2020

See all articles by Sarena Goodman

Sarena Goodman

Board of Governors of the Federal Reserve System

Alvaro Mezza

Board of Governors of the Federal Reserve System

Alice H. Volz

affiliation not provided to SSRN

Date Written: April 2020

Abstract

We examine the persistence of inequality through credit health, linking administrative records from several sources. We document that childhood circumstances are strongly predictive of financial fragility in adulthood, with credit scores among those from disadvantaged backgrounds nearly 100 points lower and 20 percentage points more likely to qualify as subprime. We find evidence this relationship reflects differences in human capital and debt management; still, neither appears to fully explain the relationship. Our results reveal another dimension along which childhood circumstances persist into adulthood and could mean the many settings that evaluate individuals based on their credit health help reinforce inequities.

JEL Classification: D12, E24, I32

Suggested Citation

Goodman, Sarena and Mezza, Alvaro and Volz, Alice H., On Intergenerational Immobility: Evidence that Adult Credit Health Reflects the Childhood Environment (April 2020). Economic Inquiry, Vol. 58, Issue 2, pp. 780-801, 2020, Available at SSRN: https://ssrn.com/abstract=3597046 or http://dx.doi.org/10.1111/ecin.12862

Sarena Goodman (Contact Author)

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

Alice H. Volz

affiliation not provided to SSRN

No Address Available

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
0
Abstract Views
63
PlumX Metrics