The phenomenon of overindebted private households has created economic and political concern, also in Germany. Using measures of relative (over-) indebtedness which relate household income and debt services to different concepts of subsistence level, this paper investigates the question whether severe household indebtedness is mainly driven by trigger events such as unemployment, childbirth, divorce, ...
This paper analyzes differences in self-assessed debt burdens of German households confronted with an objective debt burden. Using data from the German Socio-Economic Panel, my econometric analysis shows that a household's subjective debt burden is not only influenced by the current constellation of income, debt service and, possibly, the potential subsistence level, but also by expectations of ...