This article presents empirical evidence with respect to two constraints on workers' intertemporal labor supply: the liquidity constraint which prevents workers from borrowing against future consumption to accommodate wage changes; and consumption commitments which, due to transaction costs,...

I find quantitative evidence of a significant effect for credit constraints on durable consumption during a post-deregulation consumer spending spree. The effect varied markedly across age and educational groups. Young households with low levels of education displayed high sensitivity to credit...