Financial Access and Labor Market Outcomes: Evidence from Credit Lotteries
American Economic Review
vol. 114,
no. 6, June 2024
(pp. 1854-81)
Abstract
We assess the employment and income effects of access to credit dedicated to investment in individual mobility by exploiting time-series variation in access to credit through lotteries for participants in a group-lending mechanism in Brazil. We find that access to credit for investment in individual mobility increases formal employment rates and salaries, yielding an annual rate of return of 12 to 15 percent. Consistent with a geographically broader job search, individuals transition to jobs farther from home and public transportation. Our results suggest that accessing distant labor markets through credit for investment in individual mobility yields high and persistent returns.Citation
Van Doornik, Bernardus, Armando Gomes, David Schoenherr, and Janis Skrastins. 2024. "Financial Access and Labor Market Outcomes: Evidence from Credit Lotteries." American Economic Review, 114 (6): 1854-81. DOI: 10.1257/aer.20230585Additional Materials
JEL Classification
- D44 Auctions
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- J61 Geographic Labor Mobility; Immigrant Workers
- J64 Unemployment: Models, Duration, Incidence, and Job Search
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration