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On Intergenerational Immobility: Evidence That Adult Credit Health Reflects The Childhood Environment

Author

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  • Sarena Goodman
  • Alvaro Mezza
  • Alice H. Volz

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 D12, E24, I32)

Suggested Citation

  • Sarena Goodman & Alvaro Mezza & Alice H. Volz, 2020. "On Intergenerational Immobility: Evidence That Adult Credit Health Reflects The Childhood Environment," Economic Inquiry, Western Economic Association International, vol. 58(2), pages 780-801, April.
    • Handle: RePEc:bla:ecinqu:v:58:y:2020:i:2:p:780-801
    DOI: 10.1111/ecin.12862
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    Cited by:

    1. Ryan M. Goodstein & Alicia Lloro & Sherrie L.W. Rhine & Jeffrey M. Weinstein, 2021. "What accounts for racial and ethnic differences in credit use?," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(2), pages 389-416, June.

    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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