Financial Access and Labor Market Outcomes: Evidence from Credit Lotteries
Bernardus Van Doornik, Armando Gomes, David Schoenherr, Janis Skrastins
American Economic Review · 2024 · Volume 114 · Issue 6
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.
Keywords
Auctions, Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital, Aggregate Labor Productivity, Banks, Depository Institutions, Micro Finance Institutions, Mortgages, Household Finance: Household Saving, Borrowing, Debt, and Wealth, Geographic Labor Mobility, Immigrant Workers, Unemployment: Models, Duration, Incidence, and Job Search, Economic Development: Human Resources, Human Development, Income Distribution, Migration
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