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Debt Tolerance, Gender, and the Great Recession

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  • Erin E. George
  • Mary Eschelbach Hansen
  • Julie Lyn Routzahn

Abstract

We pool four Surveys of Consumer Finances to measure the extent to which tolerance of debt is influenced by macroeconomic events (the Great Recession and events in early adulthood), personal experiences of negative economic shocks (unemployment and difficulty making payments), and gender. Recent personal experience is the best predictor of debt tolerance. Unemployment and difficulty paying bills increase tolerance of debt to meet living expenses by 20%–30%. A woman who has one of these negative experiences is substantially less likely than a man to approve of debt used to buy luxuries. While neither recent macroeconomic events nor macroeconomic conditions in young adulthood affect debt tolerance, there is some evidence of a gendered response to the Great Recession. As women observed the negative effects of the mortgage crisis and the Great Recession on other women, it reinforced their belief that it is okay for people like them to use credit to bridge gaps in income.

Suggested Citation

  • Erin E. George & Mary Eschelbach Hansen & Julie Lyn Routzahn, 2018. "Debt Tolerance, Gender, and the Great Recession," Journal of Consumer Affairs, Wiley Blackwell, vol. 52(3), pages 711-732, November.
    • Handle: RePEc:bla:jconsa:v:52:y:2018:i:3:p:711-732
    DOI: 10.1111/joca.12184
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    Cited by:

    1. Schleich, Joachim & Faure, Corinne & Meissner, Thomas, 2021. "Adoption of retrofit measures among homeowners in EU countries: The effects of access to capital and debt aversion," Energy Policy, Elsevier, vol. 149(C).
    2. Lucia F. Dunn & Ida A. Mirzaie, 2023. "Gender Differences in Consumer Debt Stress: Impacts on Job Performance, Family Life and Health," Journal of Family and Economic Issues, Springer, vol. 44(3), pages 550-567, September.
    3. Aswathi Rebecca Asok & Joe Cox, 2024. "Debt Attitude and Debt Accumulation among Rural Poor Households in a Developing Region: A Q-squared Approach," Working Papers in Economics & Finance 2024-03, University of Portsmouth, Portsmouth Business School, Economics and Finance Subject Group.

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