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Racial Disparities in Credit Constraints in the Great Recession: Evidence from the UK

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  • John Gathergood

Abstract

This paper investigates racial disparities in household credit constraints using U.K. survey data. We find a widening disparity in the proportion of racial minority households reporting they face credit constraints compared with non-minority households over the period 2006-2009. By 2009 three times as many racial minority households faced credit constraints compared with White households. The difference in credit constraints across racial minority and non-minority households is not explained by a broad set of covariates. While crosssection variation in reported credit constraints might most likely reflect unobservables, we argue this time series variation is very unlikely to arise due to unobservables and is evidence of growing perceived disparity in credit access between racial groups over the period.

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  • John Gathergood, 2011. "Racial Disparities in Credit Constraints in the Great Recession: Evidence from the UK," Discussion Papers 11/09, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    • Handle: RePEc:not:notcfc:11/09
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    Cited by:

    1. French, Declan, 2023. "Exploring household financial strain dynamics," International Review of Financial Analysis, Elsevier, vol. 86(C).
    2. Jaanika Meriküll, 2015. "Household Borrowing During a Creditless Recovery," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(5), pages 1051-1068, September.
    3. Solomon Y. Deku & Alper Kara & Philip Molyneux, 2016. "Access to consumer credit in the UK," The European Journal of Finance, Taylor & Francis Journals, vol. 22(10), pages 941-964, August.
    4. Zhang Sisi & Feng Shuaizhang, 2017. "Understanding the Unequal Post-Great Recession Wealth Recovery for American Families," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 17(4), pages 1-18, October.

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    Keywords

    credit constraints; race.;

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