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Article
Publication date: 8 April 2021

Robert Bednarzik, Andreas Kern and John Hisnanick

This paper aims to analyze the question of how household indebtedness impacts households’ incentives to search for and accept work after displacement.

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Abstract

Purpose

This paper aims to analyze the question of how household indebtedness impacts households’ incentives to search for and accept work after displacement.

Design/methodology/approach

To analyze the relationship between household indebtedness and unemployment duration, this paper applies standard proportional hazard models. For data, this paper relies on the longitudinal US National Survey of Income and Program Participation (SIPP), covering the period between 2008 and 2012.

Findings

The findings show that a 10% increase in household debt increases the likelihood (hazard) of leaving unemployment by 0.2%–0.4% points. Independent of measuring a household's indebtedness and in light of a series of robustness tests, the results indicate that the pressure of servicing an existing debt burden forces individuals to return to work.

Social implications

From a policy perspective, the research findings support the notion that household indebtedness plays an important mediating role for labor market outcomes through influencing households’ incentives to return to work after displacement. This finding has important implications for the design of effective policy responses to mass layoffs during the current pandemic.

Originality/value

A key innovation of the research is that we can show that household indebtedness impacts the labor supply side. From a macroeconomic perspective, this insight is important in better understanding the role of increased indebtedness (and financialization) in amplifying aggregate macroeconomic dynamics.

Details

Journal of Financial Economic Policy, vol. 13 no. 5
Type: Research Article
ISSN: 1757-6385

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Article
Publication date: 1 December 2001

John J. Hisnanick

Hospitals adjusted their admitting practices and treatment protocols in response to the prospective payment system (PPS) enacted by the Health Care Financing Agency over a decade…

798

Abstract

Hospitals adjusted their admitting practices and treatment protocols in response to the prospective payment system (PPS) enacted by the Health Care Financing Agency over a decade ago. Under PPS it is often not profitable for a hospital to admit and treat chronically ill individuals, with Medicare coverage, who may require extended periods of in‐patient care. It has been suggested in the literature that hospitals engage in “patient dumping”, or shifting high‐cost Medicare patients to public hospitals, to minimize loses. Institutional factors and market deficiencies result in discriminatory practices towards poor, elderly and disabled patients with limited or no health insurance coverage in the provision of health care. US Department of Veteran Affairs medical centers, however, provide an alternative, or safety net, for poor, elderly and disabled veterans who would be prime Medicare candidates for patient dumping.

Details

International Journal of Social Economics, vol. 28 no. 10/11/12
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 1 April 2024

Laura Lamb

This study aims to gain insight into the motivations behind the decision to use high-cost payday loans by households who possess mainstream credit and to determine whether this…

273

Abstract

Purpose

This study aims to gain insight into the motivations behind the decision to use high-cost payday loans by households who possess mainstream credit and to determine whether this behavior has changed over time.

Design/methodology/approach

Using data from Statistics Canada’s Surveys of Financial Security, probit models are used to examine the sociodemographic and financial indicators associated with payday loan use.

Findings

The analysis uncovers the sociodemographic and financial characteristics of payday loan-user households with access to lower-cost short-term loans. The findings indicate that the likelihood of payday loan use has risen over time. Additional analysis reveals that indicators of financial instability are positively associated with payday loan use among this group.

Research limitations/implications

This research highlights the dichotomy of payday loan users and recommends policymakers tailor solutions to the specific needs of different types of payday loan users.

Practical implications

This research highlights the distinguishing sociodemographic and financial characteristics of payday loan user households and recommends policymakers tailor solutions to the specific needs of different types of payday loan users.

Originality/value

This is the first study, to our knowledge, to focus analysis on payday loan use of those with access to lower-cost short-term credit alternatives in Canada and to include measures of financial instability in the analysis. This research is timely given the current economic environment of high interest rates and high levels of household debt.

Details

Journal of Financial Economic Policy, vol. 16 no. 3
Type: Research Article
ISSN: 1757-6385

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