This paper examines whether unsecured credit markets help disadvantaged households supplement temporary shortfalls in earnings by investigating how unsecured debt responds to unemployment-induced earnings losses. Results indicate that very low-asset households--those in the bottom decile of total assets--do not borrow in response to these…

Cautions that acceptance of a higher level of unemployment will seriously delay, or even eliminate, the prospect of black incomes reaching equality with white income levels. (BH)

Expanding welfare benefits to include two-parent families has long been considered an option for a public policy designed to strengthen family units. Findings suggest that these families would be better aided by wage subsidies that reduce unemployment of family heads and raise earnings of the family's working members. (JOW)