The double impact of deep social unrest and a pandemic: Evidence from Chile

This work studies the impact of the Social Explosion and COVID‐19 crisis on the household sector in Chile. The Social Explosion in October 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‐19 pandemic due to the public policies implemented. The expansion of the public support policies in August 2020 decreased the debt risk to levels similar to before the two crises.