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Federal Reserve Bank of Philadelphia
Who is screened out of social insurance programs by entry barriers? Evidence from consumer bankruptcies
Entry barriers into social insurance programs will be effective screening devices if they cause only those individuals receiving higher benefits from a program to participate in that program. We find evidence for this by using plausibly exogenous variations in travel-related entry costs into the Canadian consumer bankruptcy system. Using detailed balance sheet and travel data, we find that higher travel-related entry costs reduce bankruptcies from individuals with lower financial benefits of bankruptcy (unsecured debt discharged, minus secured assets forgone). When compared across filers, each extra kilometer traveled to access the bankruptcy system requires approximately $11 more in financial benefits from bankruptcy.
Supersedes Working Paper 14-18
Cite this item
Vyacheslav Mikhed & Barry Scholnick, Who is screened out of social insurance programs by entry barriers? Evidence from consumer bankruptcies, Federal Reserve Bank of Philadelphia, Working Papers 15-40, 22 Oct 2015.
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
- K35 - Law and Economics - - Other Substantive Areas of Law - - - Personal Bankruptcy Law
Keywords: Social insurance; Consumer bankruptcy; Filing costs; Entry barriers
This item with handle RePEc:fip:fedpwp:15-40
is also listed on EconPapers
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