Economics Seminar（2015-10）

Topic: Credit Scores and Committed Relationships

Speaker:Geng Li

Affiliation: Federal Reserve Board

Time: Tuesday, May 26 from 2:00-3:30pm

Location: Room 217, Guanghua Building 2

Abstract:

This paper presents novel evidence on the role of credit scores in the dynamics of committed

relationships. We document substantial positive assortative mating with respect to credit scores on top of that with respect to other socioeconomic and demographic characteristics. As a result, the individual-level credit access inequality is largely preserved at the household level. The within-couple score gaps narrow appreciably after relationship formation, but to a less extent for couples that eventually separate. Moreover, we find that the average level and match quality of credit scores at the time of relationship formation are potent factors predicting subsequent separations, through and beyond their effects on use of credit and financial distress. We argue that credit scores likely reveal crucial information regarding one’s underlying trustworthiness and illustrate the information essence credit scores share with survey-based subjective measures of trustworthiness.

CV

Your participation is warmly welcomed!