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Distribution of Assets, Debt, and Income of Chilean Households

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  • Paulo Cox
  • Eric Parrado
  • Jaime Ruiz-Tagle

Abstract

This paper summarizes the main results from the latest household panel survey (Social Protection Survey 2004/05 about the distribution of assets, debt and income across Chilean households. Several appealing conclusions can be drawn. First of all, it is worth stressing that a relatively small proportion of households hold a large share of debts, assets and income. In particular, the richest quintile concentrates 57% and 43% of debts and assets, respectively. Overall, households that hold the largest share of the debt are composed by young adults with higher education and formal employment contracts. The analysis also shows that, for the vast majority of households, 80%, their assets are greater than their liabilities, and hence, they are financially less vulnerable to changes in macroeconomic and financial conditions. Only 4% of households register negative net worth and a heavy debt service burden. This highly vulnerable group concentrates 9% of total debt.

Suggested Citation

  • Paulo Cox & Eric Parrado & Jaime Ruiz-Tagle, 2006. "Distribution of Assets, Debt, and Income of Chilean Households," Working Papers Central Bank of Chile 388, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:388
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_388.pdf
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    References listed on IDEAS

    as
    1. Guy Debelle, 2004. "Macroeconomic implications of rising household debt," BIS Working Papers 153, Bank for International Settlements.
    2. Eric Parrado H. / & Paulo Cox P. & Marcelo Fuenzalida C., 2009. "Evolution of Housing Prices in Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 12(1), pages 51-68, April.
    3. Cristina Barceló, 2006. "Imputation of the 2002 wave of the Spanish survey of household finances (EFF)," Occasional Papers 0603, Banco de España.
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    1. Thorvardur Tjörvi Ólafsson & Karen Á. Vignisdóttir, 2012. "Households’ position in the financial crisis in Iceland. Analysis based on a nationwide household-level database," Economics wp59, Department of Economics, Central bank of Iceland.
    2. Felipe Martínez & Francisca Uribe, 2018. "Determinants of Household Position within Chilean Wealth Household’s Distribution," Working Papers Central Bank of Chile 827, Central Bank of Chile.
    3. Marcelo Fuenzalida & Jaime Ruiz-Tagle, 2011. "Household Financial Vulnerability," Central Banking, Analysis, and Economic Policies Book Series, in: Rodrigo Alfaro (ed.),Financial Stability, Monetary Policy, and Central Banking, edition 1, volume 15, chapter 10, pages 299-326, Central Bank of Chile.
    4. Micco, Alejandro & Parrado, Eric & Piedrabuena, Bernardita & Rebucci, Alessandro, 2012. "Housing Finance in Chile: Instruments, Actors, and Policies," IDB Publications (Working Papers) 3965, Inter-American Development Bank.
    5. Mattias Persson, 2009. "Household indebtedness in Sweden and implications for financial stability – the use of household-level data," BIS Papers chapters, in: Bank for International Settlements (ed.), Household debt: implications for monetary policy and financial stability, volume 46, pages 124-135, Bank for International Settlements.
    6. Arend, Mario, 2009. "A Small Open Economy with Heterogenous Agents Facing Interest Rate Ceilings on Loans," MPRA Paper 19427, University Library of Munich, Germany.
    7. Jaime Ruiz-Tagle & Francis Vella, 2010. "Borrowing Constraints and Credit Demand," Working Papers Central Bank of Chile 578, Central Bank of Chile.

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