Job displacement and financial outcomes

Abstract Using two proprietary datasets on earnings and credit outcomes, this paper finds that both high- and low-earners take a significant and persistent hit to income after job displacement. But these losses only translate into worse credit conditions – higher credit card utilization, lower FICO scores, and a pick up in the rate of card accounts that are delinquent or over limit – among low- earners. We observe no negative implications among higher income households, providing novel empirical evidence of the economically disparate impact of job loss.