Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/258926 
Year of Publication: 
2020
Series/Report no.: 
CEBI Working Paper Series No. 12/20
Publisher: 
University of Copenhagen, Department of Economics, Center for Economic Behavior and Inequality (CEBI), Copenhagen
Abstract: 
How do households respond to job loss, and which self-insurance channels are most important? By linking customer data from the largest bank in Denmark with information from government administrative registers, we quantify a broad range of responses to job loss in a unified empirical framework. Two response margins stand out: during the first 24 months after job loss, households reduce spending by 30% of the income loss while reduced saving in liquid assets accounts for 50%. Other response margins highlighted in the literature - spousal labor supply, private transfers, home equity extraction, mortgage refinancing, and consumer credit - are less important.
Subjects: 
Household economics
unemployment
self-insurance
transaction data
JEL: 
D14
G51
G52
J65
Document Type: 
Working Paper

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