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Job polarisation and household borrowing

Author

Listed:
  • Michele Cantarella

    (IMT School for Advanced Studies Lucca
    University of Helsinki)

  • Ilja Kristian Kavonius

    (University of Helsinki)

Abstract
The last few decades have seen transformative changes to the structure of employment, which have led to a deterioration in demand for middle-skill occupations, a process known as job polarisation. As demand for middle-skill workers shrinks, expectations about households’ income through their lifetime horizon must be adjusted. It is possible that these expectations loop back into the credit system and affect the lending behaviour of credit institutions or that they impact households’ self-assessment of their opportunities to borrow money. In this paper we study how the process of job polarisation affects credit demand and supply, studying its relationship with credit constraint and credit quality.

Suggested Citation

  • Michele Cantarella & Ilja Kristian Kavonius, 2024. "Job polarisation and household borrowing," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 22(4), pages 959-980, December.
    • Handle: RePEc:spr:joecin:v:22:y:2024:i:4:d:10.1007_s10888-024-09624-x
    DOI: 10.1007/s10888-024-09624-x
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    More about this item

    Keywords

    Job polarisation; Job security; Household credit; Employment expectations;
    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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