Labeled loans and human capital investments

Britta Augsburg, Bet Caeyers, Sara Giunti, Bansi Malde and Susanna Smets

Journal of Development Economics, 2023, vol. 162, issue C

Abstract: Imperfect capital markets and commitment problems impede lumpy human capital investments. Labeled loans have been postulated as a potential solution to both constraints, but little is known about the role of the label in influencing investment choices in practice. We draw on a cluster randomized controlled trial in rural India to test predictions from a theoretical model, providing novel evidence that labeled microcredit is effective in influencing household borrowing and investment decisions and increasing take-up of a lumpy human capital investment, a toilet.

Keywords: Credit constraints; Microcredit; Labels; Commitment device; Fungibility; Sanitation; Subsidies (search for similar items in EconPapers)
JEL-codes: D14 G41 H24 I12 I38 O16 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Labeled loans and human capital investments (2023)
Working Paper: Labelled loans and human capital investments (2021)
Working Paper: Labelled Loans and Human Capital Investments (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:162:y:2023:i:c:s0304387823000081

DOI: 10.1016/j.jdeveco.2023.103053

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