Social Stratification of Debt: the Evolution and Distribution of Debt and Financial Stress in the United Kingdom

• In Event: 411 - Section on Inequality, Poverty, and Mobility Refereed Roundtable Session and Business Meeting
  In Refereed Roundtable 60min: Table 04. The Financial Aspects of Inequality.

Abstract

In the backdrop of the global financial crisis, household indebtedness has become the center of attention as both the cause and the consequences of the crisis. In this paper we look at the evolution of indebtedness in the period of over two decades, 1991-2012 using the British Household Panel Survey and its follow-up -Understanding Society. We are particularly interested in the distribution of indebtedness among socio-economic groups and how this distribution has changed over time. We ask whether economic burdens have become more concentrated on particular socio-economic groups. We analyse the evolution of debt among socio-economic groups defined by income, social class, and age. In lines with statistics from National Accounts, we find that debt has increased substantially within a decade in 2000-2008. However, lower income groups and social classes have become particularly indebted relative to their income. This paper sheds light on an important dimension social stratification and the distribution of advantage and disadvantage.

Author

• Marii Paskov, University of Oxford