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

Anthony A. DeFusco; Brandon M. Enriquez; Margaret B. Yellen

doi:10.3386/w30724

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

Anthony A. DeFusco, Brandon M. Enriquez & Margaret B. Yellen

Working Paper 30724

DOI 10.3386/w30724

Issue Date December 2022

Revision Date February 2023

Wage garnishment allows creditors to deduct money directly from workers’ paychecks to re-pay defaulted debts. We document new facts about wage garnishment between 2014–2019 using data from a large payroll processor who distributes paychecks to approximately 20%of U.S. private-sector workers. As of 2019, over one in every 100 workers was being garnished for delinquent debt. The average garnished worker experiences garnishment for five months, during which approximately 11% of gross earnings is remitted to their creditor(s). The beginning of a new garnishment is associated with an increase in job turnover rates but no intensive margin change in hours worked.

The results in this paper reflect the views of the authors and not necessarily those of ADP. Per our data use agreement, ADP approved the research topic for this paper upfront and reviewed the paper prior to distribution with the sole focus of making sure that the paper did not release information that would compromise the privacy of their clients or reveal proprietary information about the ADP business model. We thank Marie Antonello, Mita Goldar, Nela Richardson, and Ahu Yildirmaz for facilitating access to the data. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
MARC RIS BibTeΧ
- December 6, 2022

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

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