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Much Ado about Nothing? New Evidence on the Effects of Payday Lending on Military Members

Author

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  • Susan Payne Carter

    (U.S. Military Academy, West Point)

  • William Skimmyhorn

    (U.S. Military Academy, West Point)

Abstract

We evaluate the effect that payday loan access has on credit and labor market outcomes of individuals in the U.S. Army. Using the conditional random assignment of service members to different locations, we employ three identification strategies: cross-sectional variation in state policies, within-term variation in payday lending access, and a difference-in-difference analysis using the national Military Lending Act. We find few adverse effects of payday loan access on service members when using any of these methods, even when we examine dozens of subsamples that explore potential differential treatment effects.

Suggested Citation

  • Susan Payne Carter & William Skimmyhorn, 2017. "Much Ado about Nothing? New Evidence on the Effects of Payday Lending on Military Members," The Review of Economics and Statistics, MIT Press, vol. 99(4), pages 606-621, July.
    • Handle: RePEc:tpr:restat:v:99:y:2017:i:4:p:606-621
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    Cited by:

    1. Jakub Grossmann & Stepan Jurajda, 2023. "Voting under Debtor Distress," CERGE-EI Working Papers wp744, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    2. Sarah Miller & Cindy K. Soo, 2020. "Does Increasing Access to Formal Credit Reduce Payday Borrowing?," NBER Working Papers 27783, National Bureau of Economic Research, Inc.
    3. Fekrazad, Amir, 2020. "Impacts of interest rate caps on the payday loan market: Evidence from Rhode Island," Journal of Banking & Finance, Elsevier, vol. 113(C).
    4. Fitzpatrick, Katie, 2024. "Non-bank credit and food hardship: The association between payday loans, pawn loans, rent-to-own contracts and food hardship in households with children," Children and Youth Services Review, Elsevier, vol. 157(C).
    5. Craig Wesley Carpenter & Kristopher Deming & John Anders & Michael Lotspeich‐Yadao & Charles M. Tolbert & Adam Ingrao, 2024. "Do payday lending bans protect or constrain regional economies? Evidence from the Military Lending Act's final rule," Contemporary Economic Policy, Western Economic Association International, vol. 42(2), pages 319-335, April.
    6. Dasgupta, Kabir & Mason, Brenden J., 2020. "The effect of interest rate caps on bankruptcy: Synthetic control evidence from recent payday lending bans," Journal of Banking & Finance, Elsevier, vol. 119(C).
    7. J. Brandon Bolen & Gregory Elliehausen & Thomas W. Miller, 2020. "Do Consumers Need More Protection From Small‐Dollar Lenders? Historical Evidence And A Roadmap For Future Research," Economic Inquiry, Western Economic Association International, vol. 58(4), pages 1577-1613, October.
    8. Miller, Thomas, 2019. "How Do Small-Dollar, Nonbank Loans Work?," Annals of Computational Economics, George Mason University, Mercatus Center, April.
    9. Carter, Susan Payne & Swisher, Ryan D., 2020. "The effect of moving away from home on employee retention: Evidence among U.S. army soldiers," Regional Science and Urban Economics, Elsevier, vol. 85(C).

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