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  3. American Economic Review: Insights
  4. March 2024
  5. Wage Garnishment in the United States: New Facts from Administrative Payroll Records

Wage Garnishment in the United States: New Facts from Administrative Payroll Records

  • Anthony A. DeFusco
  • Brandon Enriquez
  • Maggie Yellen
American Economic Review: Insights
vol. 6, no. 1, March 2024
(pp. 38-54)
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Abstract

Wage garnishment allows creditors to deduct money from workers' paychecks to repay defaulted debts. We document new facts about wage garnishment between 2014 and 2019 using data from a large payroll processor that distributes paychecks to approximately 20 percent of US private-sector workers. By 2019, over 1 in every 100 workers was being garnished for delinquent debt. The average garnished worker experiences garnishment for five months, during which approximately 11 percent of gross earnings is remitted to their creditor(s). The beginning of a garnishment is associated with an increase in job turnover but no intensive margin change in hours worked.

Citation

DeFusco, Anthony A., Brandon Enriquez, and Maggie Yellen. 2024. "Wage Garnishment in the United States: New Facts from Administrative Payroll Records." American Economic Review: Insights, 6 (1): 38-54. DOI: 10.1257/aeri.20220487

Additional Materials

JEL Classification

  • G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
  • J22 Time Allocation and Labor Supply
  • J63 Labor Turnover; Vacancies; Layoffs