New research finds that states with generous unemployment benefits reduce household borrowing during job loss. Using detailed state-level data, authors show lower benefit generosity increases debt levels significantly after job loss. Paradoxically, despite economic risks from high personal debt, voters support stronger safety nets in areas where credit substitutes for welfare protection.
| How Credit Markets Substitute for Welfare States and Influence Social Policy Preferences: Evidence from U.S. States was authored by Andreas Wiedemann. It was published by Cambridge in BJPS in 2022. |
