2014 Conference

Unsecured debts among the employed and the unemployed were examined using the 2010 Survey of Consumer Finances (SCF). Unsecured debts included credit card debt, unsecured loans from financial institutions, outstanding bills including medical bills, and loans from individuals. The logistic regressions and OLS were used to investigate the likelihood of borrowing money for living expenses and the amount of unsecured debts. Preliminary results found that among employed respondents, being older and/or female were negatively related to the likehood of borrowing money for living expenses and positive attitude toward consumer credit; loan turndown experience and the number of credit cards were positively associated with the likelihood of borrowing money for living expenses. For the unemployed, older respondents were less likely to borrow money for living expenses and those with positive attitudes toward consumer credit were more likely to borrow money for living expenses. Financial assets were negatively related to the amount of unsecured debts and the number of credit cards was positively associated with the amount of unsecured debts. The results showed that the households with very low financial or nonfinancial assets could not borrow from unsecured credit markets in response to temporary income shock.