Researcher

This descriptive analysis examines the importance of personal financing sources, especially mortgages secured by residential property, to small businesses from 1998 through 2007. About 80 percent of the total debt owned by small business-owning house-holds is held in mortgages and installment loans. The likelihood of holding a residential mortgage increased from 64.7 percent in 1998 to over 73 percent in 2007, and the share of total debt held in residential mortgages increased from 67.3 percent in 1998 to 70.6 percent in 2007 for small business-owning households.

This literature review provides an overview of research on the following small-dollar credit products: auto title loans, pawnshops, payday lending, refund anticipation loans (RALs) and checks (RACs), and rent-to-own (RTO). This review includes recently published research. It is not intended as an exhaustive treatment of these topics, but is designed to highlight key findings relevant for additional research.

This report addresses two sets of research questions related to Refund anticipation loans (RALs) and refund atnticipation checks (RACs) First, the authors ask who obtains them and who does not and what demographic, economic, and geographic factors are associated with the use of these products. The authors provide descriptive breakdowns of many individual and geographical characteristics that are linked with use of RALs/RACs, and then conduct quantitative analysis of IRS-provided data on millions of tax filers who received a refund in tax year 2008.

In January 2009, the FDIC sponsored a special supplement to the U.S. Census Bureau’s Current Population Survey (CPS) to collect data to determine the number of U.S. households that lack a deposit account with a financial institution (checking or savings account) and reasons for not having/using a bank account.

Abstract: This report examines the utilization of a state earned income credit by current and former welfare recipients using two measures: receipt among all current and former welfare recipients and among only those eligible for the credit. Both measures may be useful, depending upon which groups policymakers hope to target.

Abstract: Only about one-fifth of respondents in the Reuters/University of Michigan survey report that the 2008 tax rebates led them to mostly increase spending, while over half said it would lead them to mostly pay off debt. Of those in the mostly-spend category, the response was swift, with over 80 percent reporting increasing their spending within three months of receiving their rebate. Older households, households with higher wealth and higher income, and those expecting future income growth were generally more likely to spend the rebates.

Abstract: Using the Panel Study of Income Dynamics, we document that, controlling for observable characteristics, household investors' likelihood of entering the stock market within the next five years is about 30 percent higher if their parents or children had entered the stock market during the previous five years.

This paper describes an equilibrium life-cycle model of housing where nonconvex adjustment costs lead households to adjust their housing choice infrequently and by large amounts when they do so. In the cross-sectional dimension, the model matches the wealth distribution; the age profiles of consumption, homeownership, and mortgage debt; and data on the frequency of housing adjustment. In the time-series dimension, the model accounts for the procyclicality and volatility of housing investment, and for the procyclical behavior of household debt.

Using data from the Panel Study of Income Dynamics, this paper considers the mechanism by which changing house values impact U.S. household spending. The results suggest that house values affect consumption by serving as collateral for households to borrow against to smooth their spending. The results show that the consumption of households who need to borrow against their home equity increases by roughly 11 cents per $1.00 increase in their housing wealth.

The case is often made that financial education leads to improved financial decisions. In this paper, we begin by assessing the need for financial education by reviewing national trends in savings, debt, and retirement funding as well as by reviewing the literature linking personal financial behavior and participation in financial education programs. We then describe the conceptual underpinnings of a link between improved personal financial behavior and work outcomes.