Liquidity constraints and debts: Implications for the saving behavior of the middle class

Savings are essential for families to respond risks against adverse financial shocks and reduce costs of uncertainties in the future. However, personal savings have been decreasing among US households. This study analyzes determinants liquidity constraints relatively understudied middle class. The finds evidence substantial constraints—Eighty percent households class constrained. Furthermore, results suggest that high-debt payments high-interest-rate credit cards amplify effects tightness hinder children's education, a first-home purchase, or later-on-in-life medical spending.