Published papers

Revolving versus Convenience Use of Credit Cards: Evidence from U.S. Credit Bureau Data (with Scott Schuh, Journal of Money, Credit and Banking, 2023.)

Abstract: Credit card payments and revolving debt are important for consumer theory but a key data source—credit bureau records—does not distinguish between current charges and revolving debt. We develop a theory-based econometric methodology using a hidden Markov model to estimate the likelihood a consumer is revolving debt each quarter. We validate our approach using a new survey linked to credit bureau data. We estimate that for likely revolvers: (i) 100% of an increase in credit becomes an increase in debt eventually; (ii) credit limit changes are half as salient as debt changes; and (iii) revolving status is persistent.

Ungated working paper version 

Does getting a mortgage affect consumer credit use? (with Joanna Stavins, Review of Economics of the Household, 2021.)

Abstract: Buying a house changes a household’s balance sheet by simultaneously reducing liquidity and introducing mortgage payments, which may leave the household more exposed to other shocks. We examine how this change impacts consumer credit beyond the mortgage. Using a large panel, we show that on acquiring a mortgage, credit card debt increases by about $1500 in the short term, severe delinquencies increase by 2.2 percentage points, and credit card utilization—the fraction of a consumer’s credit card limit that is used—increases by 11 percentage points. In the long term, credit card balances increase by $3900 and delinquencies by 9.1 percentage points. In our sample period before the 2008 financial crisis, credit limits increased faster than debt in the long run, pushing down long-term utilization. After the financial crisis, debt increased faster than credit limits in the long run, and credit card utilization rates rose upon the acquisition of a new mortgage, consistent with larger down payments leaving households more constrained.

Ungated working paper version 

Does It Matter Where You Came From? Ancestry Composition and Economic Performance of U.S. Counties, 1850 – 2010 (with Ivan Petkov and Fabio Schiantarelli, Journal of Economic Growth, 25:341–380. 2020. 

Abstract: What impact on local development do immigrants and their descendants have in the short and long term? The answer depends on the attributes they bring with them, what they pass on to their children, and how they interact with other groups. We develop the first measures of the country-of-ancestry composition and of GDP per worker for US counties from 1850 to 2010. We show that changes in ancestry composition are associated with changes in local economic development. We use the long panel and several instrumental variables strategies in an effort to assess different ancestry groups’ effect on county GDP per worker. Groups from countries with higher economic development, with cultural traits that favor cooperation, and with a long history of a centralized state have a greater positive impact on county GDP per worker. Ancestry diversity is positively related to county GDP per worker, while diversity in origin-country economic development or culture is negatively related.

Supplemental Appendix

Replication Files

The credibility of exchange rate pegs and bank distress in historical perspective: lessons from the national banking era (with Felipe Schwartzman, Review of Economics and Statistics, 102(3): 600–616. 2020.)

Abstract: We examine a period during the prevalence of the gold standard in the United States to provide evidence that speculation about a currency peg can have damaging effects on bank balance sheets. In particular, the defeat of the pro-silver candidate in the 1896 presidential election was associated with a large and permanent increase in bank leverage, with the initial impact most pronounced among states where banks held more specie in proportion to their assets and were, therefore, also more committed to paying out deposits in specie. Based on the cross-sectional pattern of changes in leverage observed in 1896, we construct a measure of the credibility of the gold standard spanning the entire sample period. Changes in this measure correlate with changes in aggregate bank leverage, suggesting that uncertainty about the monetary standard played an important role in the 1893 banking panic and its aftermath.

Demand for emergency savings is higher for low-income households, but so is the cost of shocks (Empirical Economics, 58:3007–3033. 2020.)

Abstract: This paper examines how the precautionary motive varies with income. I first develop a theoretical benchmark of how we would expect precaution to vary with income starting from a basic version of the buffer-stock model. Emergency savings provide a way for households to smooth over shocks and so give insight into the precautionary motive. Using data from the Survey of Consumer Finances in the United States, I show that as income declines, the desired emergency savings relative to income increases, suggesting that low-income households are more precautionary. Observable differences, such as income uncertainty, do not explain the rise. Instead, I propose and estimate a model with a minimum subsistence level and unexpected expenses. The model implies that low-income households are increasingly exposed to shocks, explaining the increase in precaution. Supporting the approach, I show that expenses on repairs are a larger fraction of the spending of low-income households.

Ungated version and technical appendix. Also circulated as: The Precaution of the Rich and Poor

How important are banks for development? National banks in the United States 1870--1900 (Review of Economics and Statistics, 97(5):921-938. 2015.)

Abstract: What financial services matter for growth? This paper examines the effects national banks had on growth in the United States from 1870-1900. These banks were commercial not investment banks: they made short term loans and could not take land as collateral. I use the discontinuity in entry caused by a large minimum capital requirement to identify the effects of banking. Counties getting a bank increased production per person substantially and tilted production towards agriculture over manufacturing by expanding land under cultivation, not improving yields. The effects are highly persistent and show that the commercial activities of banks matter for growth.

Supplemental Appendix

Replication Files

This article is also the basis of a Cato Research Brief (Cato Institute. Research Briefs in Economic Policy. No 44. February 2016.)

The surprisingly low importance of income uncertainty for precaution (European Economic Review, 79: 151-171. 2015.)

Abstract: While it is common to use income uncertainty to explain household saving decisions, there is much disagreement about the importance of precautionary saving. This paper suggests that income uncertainty is not an important motive for saving, although households do have other precautionary reasons to save. Using a question from the Survey of Consumer Finances that asks how much households want for precautionary purposes, this paper shows that expressed household preferences, and liquid savings, are much lower than predicted by standard modeling assumptions. Households rarely list unemployment as a reason to save. Perceived income uncertainty does not affect liquid savings or precautionary preferences. Neither does being in an occupation with higher income volatility. Instead, households seem very concerned with expenditure shocks.

How important is variability in consumer credit limits? (Journal of Monetary Economics, 72:42-63. 2015. Also as Federal Reserve Bank of Boston WP 14-8, BC working paper 754)

Abstract: Using a large panel this paper first demonstrates that individuals gain and lose access to credit frequently. The estimated credit limit volatility is larger than most estimates of income volatility and varies over the business cycle. Within a model, variable credit limits create a reason for households to hold both high interest debts and low interest savings at the same time. Using the estimated credit volatility, the model explains why around one third of American households engage in this credit card puzzle. The approach also offers an important new channel through which financial system uncertainty can affect household decisions.

Program Files


MarketWatch: This is why people carry credit card balances How cutting credit limits hurts cardholders, the economy

Returns to education in India (World Development, 59: 434-450. 2014. Also as BC working paper 819)

Abstract: In India both men and women with more education live in households with greater consumption per capita. Yet aggregating across age cohorts and states, an extra year of education brings male cohorts only 4% more consumption and provides no additional consumption for female cohorts. This result is robust to: (1) accounting for survey measurement error, (2) different measures of household consumption and composition, (3) allowing returns to differ by state and school quality, and (4) age misreporting. The only area with substantial returns is entering into regular wage work which still employs only a small fraction of the population.

Replication files

The effects of financial development in the short and long run (Journal of Development Economics, 104:56-72. 2013. Also as BC working paper 741)

Abstract: Although many view financial access as a means of reducing poverty or increasing growth, empirical studies have produced contradictory results. One problem is that most studies cover only a short time frame and do not consider dynamic effects. I show that introducing credit in a general model of intertemporal consumption creates a boom in consumption and reduces poverty initially, but eventually reduces mean consumption because credit substitutes for precautionary wealth. Using new consistent consumption data that cover a much longer time period than most studies, my empirical findings show that increased access to bank branches in rural India increased consumption initially and reduced poverty, but consumption later fell and poverty rose. The long-term effect is still positive, however, suggesting that credit may have a beneficial role beyond consumption smoothing.

Data Files

Working papers and other research

Using the Courts for Private Debt Collection: How Wage Garnishment Laws Affect Civil Judgments and Access to Credit (with Eva Nagypal)

Abstract: Using court orders called civil judgments, creditors can garnish wages and seize assets for unpaid consumer debts. We provide the first comprehensive description of civil judgments across states and time. Civil judgments are about twice as common as bankruptcy filings. Civil judgments are 20 times more common in some states than others. Their incidence is the highest around age 40, decreases with credit score, and is concentrated in census tracts with a greater proportion of Black residents. To understand the cross-state variation, we build the most comprehensive panel measuring wage garnishment across states. We show that a decrease in the amount garnishable per week decreases the number of judgments per capita and increases the average civil judgment amount. These findings are consistent with a simple theoretical model where creditors optimally choose which debts to bring to civil court. Yet a decrease in the amount garnishable reduces credit card limits and open credit card accounts. The results suggest that policymakers may need to weigh access to credit when considering protecting debtors.

Making Ends Meet and the Pandemic 

Abstract: This report collects information from the Making Ends Meet survey and Consumer Credit Panel (CCP) to better understand the pandemic’s effects on households. As far as possible, it only includes new research, although some results are slight variants on already published research. The report first describes the pandemic ups and downs of some Americans. It then presents results using the Making Ends Meet survey and the CCP to describe consumer finance before the pandemic and during the pandemic. This work was conducted while I was employed at the Consumer Financial Protection Bureau.

Terms of Engagement: Migration, Dowry, and Love in Indian Marriages (with Andrew Beauchamp and Rossella Calvi)

Abstract: Nearly 80 percent of U.S. adults have a credit card, and more than half of them revolve their debt from month to month. Using a large sample of credit bureau data, this paper documents a tight link between available credit (the limit) and credit card debt, and then it offers a model-based interpretation of this linkage. Credit limits change frequently for individuals, increase rapidly on average as people age, and show large changes over the business cycle. Yet credit card debt changes nearly proportionately to credit and at about the same time, so the fraction of credit used is relatively stable over time. The authors build a life-cycle consumption model that includes the joint use of credit cards to pay directly for expenditures, to help smooth consumption against income shocks, and to borrow longer term (revolving indefinitely). The authors estimate the parameters of the model using several data sources, including a large credit bureau database and a new daily diary of consumer payment choices.

The Equilibrium Effect of Information in Consumer Credit Markets: Public Records and Credit Redistribution (with Éva Nagypál)

Abstract: Information in credit reports determines the availability and cost of credit for consumers and is frequently used to evaluate potential tenants and job applicants. Yet relatively little is known about what happens to consumers and the market equilibrium when the information contained in credit reports changes. This paper uses the nationwide purge of non-bankruptcy public records from credit reports that took place in July 2017 to estimate the individual and equilibrium effects of information removal in consumer credit markets. Examining the individual impact of the purge and the general aging off of public records before the purge, we show that individuals who had a public record removed from their credit record had substantial contemporaneous and dynamic increases in credit card limits and auto loans, with credit card limits increasing by close to 5 percent in the year following the removal. Credit card debt similarly increased, however, so credit card utilization did not appreciably change. To identify equilibrium effects, we develop an illustrative model that implies that consumers who did not have a public record prior to the purge lost more distinguishing information in the purge if they were in a market with a higher share of consumers with a public record, i.e. if they were in a submarket with a higher exposure to the purge. We estimate equilibrium  effects using variation across the credit score distribution and across states in submarkets' exposure to the purge. The results are inconclusive as to whether there was an  aggregate change in credit for the low credit score population as a consequence of the purge, but they rule out the presence of a sizable aggregate change. Consistent with our model, the primary effect of the purge was instead a redistribution of credit away from consumers without a public record in high exposure submarkets to those in low exposure ones, with the latter being typically higher credit score consumers. In terms of magnitude, a one standard deviation increase in exposure to the purge led to a 0.79\% decrease in credit card limits for consumers without a public record. 

Credit Card Utilization and Consumption over the Life Cycle and Business Cycle (with Scott Schuh)

Abstract: Nearly 80 percent of U.S. adults have a credit card, and more than half of them revolve their debt from month to month. Using a large sample of credit bureau data, this paper documents a tight link between available credit (the limit) and credit card debt, and then it offers a model-based interpretation of this linkage. Credit limits change frequently for individuals, increase rapidly on average as people age, and show large changes over the business cycle. Yet credit card debt changes nearly proportionately to credit and at about the same time, so the fraction of credit used is relatively stable over time. The authors build a life-cycle consumption model that includes the joint use of credit cards to pay directly for expenditures, to help smooth consumption against income shocks, and to borrow longer term (revolving indefinitely). The authors estimate the parameters of the model using several data sources, including a large credit bureau database and a new daily diary of consumer payment choices.


The New Republic: I Worked at Capital One for Five Years. This Is How We Justified Piling Debt on Poor Customers

Consumer Revolving Credit and Debt over the Life Cycle and Business Cycle (with Scott Schuh)

Abstract: Despite the centrality of credit and debt in the financial lives of Americans, little is known about how U.S. consumers' access and utilization of credit changes in the short and long term, and how these changes are related to changes in U.S. consumers' debt. This paper uses data from the Federal Reserve Bank of New York Consumer Credit Panel (CCP), which contains a 5 percent sample of every credit account in the United States from 1999 to 2014 from the credit reporting agency Equifax. It examines how changing credit availability, debt, and utilization over the business cycle and the life cycle and across individuals relate to U.S. consumers' patterns of incurring, carrying, and paying off their debts. Much of this paper focuses on credit cards, since these have observable limits and are widely held, but the paper also briefly examines other forms of debt over the consumer life cycle.


Bloomberg: Americans Can’t Help Themselves From Borrowing More on Credit Cards Infographic: The life cycle of a credit card

Marriage migration in India: Vast, varied, and misunderstood (also circulated as: The Puzzle of Marriage Migration in India)

Abstract: Two thirds of all Indian women have migrated for marriage, around 300 million women, but not much is known about this vast  migration. This paper provides a detailed accounting of this large migration and evaluates some of its potential causes.  Marriage migration varies substantially across India, and appears to have changed little over the previous 40 years. Contrary to conventional wisdom, marriage migration does not contribute to risk sharing or consumption smoothing. Nor is it driven by sex ratio imbalances. Instead, this paper introduces a simple model in which parents must search for a spouse for their daughter geographically. The model helps rationalize the correlations between migration, age of marriage, and literacy across districts in India. It suggests that marriage migration is part of the larger puzzle of low workforce participation, education, and bargaining power of women in India, rather than an independent phenomenon.

The changing geography of gender in India

Abstract: This paper examines the changing distribution of where women and girls live in India at the smallest possible scale: India's nearly 600,000 villages. Village India is becoming more homogeneous in its preferences for boys even as those preferences becomes more pronounced. A consequence is that more than two thirds of girls now grow up in villages where they are the minority. Most Indian women move on marriage, so parents' sex selection decisions are felt well beyond the village. Yet marriage migration does not have an equalizing influence on sexual imbalances across villages. Linking all villages across two censuses, I show that changes in village infrastructure such as roads, power supplies, or health clinics are not related to changes in child sex. Geographically close villages reinforce each other's preferences. The results suggest that there are no easy policy solutions for addressing the increasing masculinization of Indian society.

Other published work

Insights from the Making Ends Meet Survey (with Marie Rush. Consumer Financial Protection Bureau Research Brief No. 2020-1. 2020.)

U.S. Consumer Holdings and Use of $1 Bills  (with Claire Greene and William Murdock III. Federal Reserve Bank of Boston Research Data Report 15-1. 2015)


The Wall Street Journal The Boston Fed Has a Pretty Good Idea How Many Dollar Bills You’re Carrying

The Boston Globe: Even in a cash-free era, the $1 bill is still kicking


Where has all the education in India gone? Ideas For India, 18 September 2014.


Older work

The tradeoff between children and savings: Banking and fertility in India (2006)

Abstract: Interview and survey evidence suggests that children act as a form of saving for parents in India. If parents do view children as a form of investment, parents as investors should adjust the share of children in their portfolios in response to a change in the investment environment. A simple model illustrates. Using this insight, this paper examines whether the vast expansion of access to banking in India in the 1980s affected population growth by constructing a spatially consistent data set of Indian districts over three censuses and including information on new bank branches and per capita expenditure. Examining the changes between censuses using spatial error modeling reveals that there is little evidence of adjustments in fertility in response to an increase in the number of bank branches per capita at the district level. An instrumental variables approach shows some evidence that fertility decreased, but the magnitude of the coefficient is not large. Matching 500,000 villages between the 1991 and 2001 censuses shows that changes in access to the post office savings system are not related to fertility. Increased access to financial markets is likely to have little effect on fertility.


Agree to Disagree: Evidence on Forecaster Dispersion (2005)

Abstract: This paper examines the extent of dispersion across forecasters for many different variables. It finds that the dispersion is large. Forecasters do not necessarily make forecasts with zero-mean-errors, but the median forecaster has no bias. Many forecasters are consistently worse than simple univariate forecasting models, and the median forecaster has no value-added. A closer examination of the Romer and Romer (2000) result finds that while the Fed is a good forecaster it is not the best, and when compared to some private forecasters, it is the Fed that receives negative weight, overturning the Romer and Romer (2000) conclusion. Finally, a simple model which allows forecasters to purchase additional precision is developed which suggests that when the importance of forecasting increases, the mean-squared error of forecasters will decrease, while the variance across forecasters may increase or decrease. Using an index of how often inflation is in the news,  the predictions of the model are shown to have some empirical backing.