TY - JOUR T1 - Borrowing During Unemployment JF - Journal of Human Resources JO - J Hum Resour SP - 383 LP - 412 DO - 10.3368/jhr.43.2.383 VL - 43 IS - 2 AU - James X. Sullivan Y1 - 2008/03/31 UR - http://jhr.uwpress.org/content/43/2/383.abstract N2 - This paper examines whether unsecured credit markets help disadvantaged households supplement temporary shortfalls in earnings by investigating how unsecured debt responds to unemployment-induced earnings losses. Results indicate that very low-asset households—those in the bottom decile of total assets—do not borrow in response to these shortfalls. However, other low-asset households do borrow, increasing unsecured debt by more than 11 cents per dollar of earnings lost. In contrast, wealthy households do not increase unsecured debt during unemployment. The evidence suggests that very low-asset households do not have sufficient access to unsecured credit to smooth consumption over transitory unemployment spells. ER -