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The Legacy of Economic Recession in Terms of Over-Indebtedness: A Framework and Review of the Evidence

Published online by Cambridge University Press:  22 September 2020

Heikki Hiilamo
Heikki Hiilamo*
Affiliation:
Faculty of Social Sciences, University of Helsinki, Finland Finnish Institute for Health and Welfare, Helsinki, Finland E-mail: [email protected]
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Abstract

With the expansion of credit, low interest rates and overly optimistic expectations about future economic and housing price developments, mortgage lending soared in most OECD countries in the run-up to the 2008 global economic crisis. The crisis revealed the hidden epidemic of over-indebtedness, which continues to overshadow the lives of millions in rich countries. In the wake of the global economic crisis, the household debt crisis led to worsening economic conditions and put pressure on government finances, which caused further income shocks in the form of austerity measures such as social welfare cuts and higher taxes. This article is based on a scoping review aimed at summarising and reflecting on the available literature. It analyses the effects of over-indebtedness on individuals and societies across six OECD countries: Finland, Germany, the Netherlands, Norway, the UK and the US.

Keywords

Over-indebtednesseconomic crisissocio-economic positionbankruptcy
Type
Themed Section: A Hostile Decade for Social Policy: Economic Crisis, Political Crisis and Austerity 2010-20
Information
Social Policy and Society , Volume 20 , Issue 1 , January 2021 , pp. 111 - 124
Copyright
© Cambridge University Press 2020

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