What can 5 million households tell us about the impact of credit access on job finding and wage inequality?

Grant description:

This project will bring together macroeconomic theory and large-scale microeconomic datasets to advance modern economics and inform monetary and public policy. Using employment records merged to credit reports, the authors will estimate the impact of credit access on the job-finding rates and re-employment earnings of displaced workers. Past research has examined the borrowing and credit use of the unemployed, and this study builds on that line of work to examine the direct impact of credit on future outcomes. In preliminary results, the authors find that credit access increases the time before re-employment, but also increases average salary once a new job is found. This work will develop a search model capable of explaining these new findings.