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Job polarisation and household borrowing

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  • Cantarella, Michele
  • Kavonius, Ilja Kristian

Abstract

The last few decades have been accompanied by disruptive changes to the structure ofemployment which have led to deterioration in demand for middle-skill occupations, a processknown as job polarisation. As the demand for middle-skill workers shrinks, expectationsabout households’ income through their lifetime horizon are adjusted. It is unclear whetherthese expectations can loop back into the credit system, and affect the lending behaviour ofcredit institutions, or whether this process impacts on the households’ self-assessment of theiropportunities to borrow money. In this paper, we study how the process of job polarisationaffects credit demand and supply, studying its relationship with credit constraint and creditquality. JEL Classification: G51, J24, D84, O15

Suggested Citation

  • Cantarella, Michele & Kavonius, Ilja Kristian, 2022. "Job polarisation and household borrowing," Working Paper Series 2683, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20222683
    Note: 374170
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    More about this item

    Keywords

    employment expectations; household credit; job polarisation; job security;
    All these keywords.

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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