Skip to content
Subscriber Only
Opinion
Economics

How Household Debt Contributes to Unemployment: Mian and Sufi

Nov. 17 (Bloomberg) -- The weakness in household balance sheets and the associated pullback in spending are directly responsible for the lion’s share of employment losses in the U.S. economy. This deficiency remains the most significant impediment to a robust recovery.

Our research suggests that 65 percent of the job losses from 2007 to 2009 came from the drop in household spending induced by the collapse in home prices and its effect on a highly levered household sector.