Pathways of overindebted private households: Causes, characteristics, effects and possible (social) policy interventions in the case of Austria

Oesterreichische Nationalbank (Jubiläumsfonds)

The available empirical evidence shows that the number of over-indebted households in Austria has been rising considerably in the last three decades. Over-indebtedness is defined as not being able to pay back due debts with the available income of the households within a reasonable period of time. This may lead to economic destabilisation and further into poverty and social exclusion of affected household members. Understanding over-indebtedness as an exclusion process is attaching decisive importance on the specified process phases: as from the viewpoint of social policy, there must be different intervention measures implemented for each of the process phases.
The project, funded by the Jubiläumsfond of OeNB, was guided by three main objectives. It included an analysis of the current number and structure of over-indebted people in the EU-27 as well as a description of the current policy approaches against over-indebtedness. For Austria, characteristic pathways to over-indebtedness have been investigated. On the basis of this information, social policy measures have been proposed to better prevent and/or combat over-indebtedness in Austria.
In order to achieve the research objectives different methods have been applied: In addition to a literature study, qualitiative research (problem focused interviews with clients of the debt counselling organisation in Vienna), as well as quantitative analysis (cross-sectional analysis of the UDB Version of EU-SILC 2005 for EU-27 and of the Austrian EU-SILC 2008, including an extra module on debts and overindebtedness; longitudinal analysis of the ECHP 1995-2000 to analyse pathways of overindebtedness in Austria).