Financial Access and Labor Market Outcomes: Evidence from Credit Lotteries

Bernardus Van Doornik, Armando Gomes, David Schoenherr and Janis Skrastins

American Economic Review, 2024, vol. 114, issue 6, 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.

JEL-codes: D44 E24 G21 G51 J61 J64 O15 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: Financial Access and Labor Market Outcomes: evidence from credit lotteries (2021)
Working Paper: Financial Access and Labor Market Outcomes: Evidence from Credit Lotteries (2021)
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DOI: 10.1257/aer.20230585

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