Abstract
This paper studies the role of job displacement in the household bankruptcy decision. Using an event-study methodology, I find that NLSY respondents are over three times more likely to file for bankruptcy immediately following a job loss. Using county-level data, I find similar magnitudes in the aggregate, with significant effects lasting two to three years. In addition, the loss of a manufacturing job, a proxy for a more persistent separation, is 40 percent more likely to lead to bankruptcy. The results suggest that unemployment spells can have significant long-term consequences on households' credit market outcomes. JEL Classification: J63, K35, D14, R20
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