Examining the ‘Credit-Welfare State Tradeoff’ in the United States, presented by Dr. Lonnie Berger

Do More Generous Social Welfare Transfers Reduce High-Cost Consumer Borrowing? Both access to credit and household debt levels have increased substantially in the United States in recent decades, particularly among lower-income populations, such that borrowing is now a normative aspect of household financial functioning. Access to credit enables households to make human capital investments, such as attending higher education, acquire assets, such as a home, and purchase expensive necessities, such as an automobile or appliances. It can also enable households to smooth consumption and meet their basic needs in the wake of income loss. At the same time, repayment of debt, particularly that which is borrowed for short-term consumption, in response to difficult financial circumstances, or at high cost relative to one’s income or capacity for repayment, may result in economic hardship, financial or other stress and, potentially, compromised social and economic functioning and wellbeing. In this presentation, Dr. Lonnie Berger will first discuss trends in credit access and debt accumulation among U.S. households, with a particular focus on lower-income households. He will then present empirical research examining relations of social welfare program generosity with high-cost consumer borrowing and discuss its implications for family functioning and social and economic well being, social welfare policy, credit market regulation, and social work practice. About the Mary Funnyé Goldson Lecture Established in 1991, the Mary Funnyé Goldsen Lecture honors the vision and memory of its namesake, who was a beloved member of Columbia School of Social Work faculty and a tireless advocate on behalf of children and families. Targeted toward professionals who work with children and families, the Lecture is intended to expand their knowledge and strengthen their social work practice. The Goldson Lecture focuses on child welfare and support of child welfare professionals.