Industry Decline and Household Finances

Blonz, Joshua; Roth Tran, Brigitte; Siegel, Sarah; Troland, Erin; Zhao, Cindy

Journal Article

Industry Decline and Household Finances

Abstract: Technological innovations that displace demand for local producers can hurt finances for households in the same area. Demand for Appalachian coal declined precipitously between 2011 and 2018 following a technology-induced shift in electricity generation from coal to natural gas. This coal decline decreased people’s credit scores in that region and increased their credit utilization rates, credit card delinquencies, third-party collections, and bankruptcies. Credit scores fell the most for households that were already near the subprime threshold, where small changes can have large impacts on borrowing costs and access.