The Impact of Income Inequality on Household Indebtedness in Euro Area Countries

By: Jestl, Stefan.

Material type: materialTypeLabel

BookSeries: wiiw Working Papers: 173Publisher: Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 2019Description: 36 S., 13 Tables and 2 Figures, 30cm.Subject(s): Income Inequality | Keeping Up With The Joneses | Household Indebtedness | Euro AreaCountries covered: Euro Areawiiw Research Areas: Labour, Migration and Income DistributionClassification: D12 | D14 | D31 Online resources: Click here to access online Summary: This paper examines the impact of income inequality on consumption-related household indebtedness at the household level. Using the first wave of the Eurosystem Household Finance and Consumption Survey data, the analysis sheds light on heterogeneous effects across euro area countries. The results suggest a positive impact of income inequality on consumption-related household indebtedness in a small sample of countries. We further employ a multilevel regression model to also take country’s macroeconomic characteristics into account, such as credit market and welfare state design. In this setting, we find an overall positive impact of income inequality on consumption-related household indebtedness. Disclaimer Funding from the Austrian Federal Ministry of Labour, Social Affairs, Health and Consumer Protection is gratefully acknowledged.

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Paper	WIIW Library	5.700/173 (Browse shelf(Opens below))	Available		1000010005174

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This paper examines the impact of income inequality on consumption-related household indebtedness at the household level. Using the first wave of the Eurosystem Household Finance and Consumption Survey data, the analysis sheds light on heterogeneous effects across euro area countries. The results suggest a positive impact of income inequality on consumption-related household indebtedness in a small sample of countries. We further employ a multilevel regression model to also take country’s macroeconomic characteristics into account, such as credit market and welfare state design. In this setting, we find an overall positive impact of income inequality on consumption-related household indebtedness.

Disclaimer

Funding from the Austrian Federal Ministry of Labour, Social Affairs, Health and Consumer Protection is gratefully acknowledged.

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