Description

This work studies the impact of the Social Explosion and Covid crises on the household sector in Chile. The Social Explosion in October of 2019 represented a mass protest, much larger than similar events in other nations such as the Yellow Jackets. Using delinquency models calibrated with survey data, I show that household debt risk increased substantially after the Social Explosion across all income backgrounds, but fell slightly with the Covid pandemic due to the public policies implemented. The expansion of the public support policies in August of 2020 decreased the debt risk to levels similar to before the two crises.