Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300943 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17047
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Individuals with extensive debt may be granted debt relief in court. We provide a comprehensive evaluation of the Danish debt relief program with data from court records linked to nationwide register data. Using event-study methods and quasi-random assignment of applicants to court trustees with varying admission rates, we show that debt relief leads to a large increase in earned income, employment, assets, real estate, secured debt, home ownership, and wealth that persists for more than 25 years after a court ruling. The net transition of workers into employment accounts for two thirds of the increase in earned income.
Subjects: 
debt relief
personal bankruptcy
household finance
JEL: 
D14
D31
K35
Document Type: 
Working Paper

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