The Geography of Subprime Credit
Abstract: Improving the financial lives of the people living in neighborhoods with large concentrations of lowcredit-scored households1 requires an understanding of the socioeconomic and financial challenges of those places. In this study, we identify such neighborhoods and analyze their socioeconomic and financial attributes, focusing on Illinois, Indiana, Iowa, Michigan, and Wisconsin (the five states served by the Federal Reserve Bank of Chicago). We find geographic patterns in the locations of subprime-scored households, in particular that these households are more highly concentrated in urban centers, while suburban areas tend to have very few subprime households. The states of Wisconsin and Iowa have lower shares of subprime households than Illinois, Indiana, and Michigan. We also find significant differences in neighborhood characteristics in places where subprime-scored households live, including a much higher non-white share of the population, weaker labor market outcomes, lower educational attainment, and higher housing vacancy rates.
File format is application/pdf
Description: Full text
Provider: Federal Reserve Bank of Chicago
Part of Series: Profitwise
Publication Date: 2019