Despite a dozen studies, the welfare effects of payday credit are still debatable. We contribute new evidence to the debate by studying how payday credit access affects bank overdrafts (such as returned checks), bankruptcy, and household complaints against lenders and debt collectors.We find some evidence that Chapter 13 bankruptcy rates decrease after payday credit bans, but where we find that, we also find that complaints against lenders and debt collectors increase. The welfare implications of these offsetting movements are unclear. Our most robust finding is that returned check numbers and overdraft fee income at banks increase after payday credit bans. Bouncing a check may cost more than a payday loan, so this finding suggests that payday credit access helps households avoid costlier alternatives. While our findings obviously do not settle the welfare debate over payday lending, we hope they resolve it to some extent it by illuminating how households rearrange their financial affairs when payday loan supply changes.
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At this event, Dinesh Thakur will discuss his experiences and the wider problems of Indian drug quality. Pharmaceutical and medical experts will then discuss Thakur’s remarks and the safety of US and international drugs.
Join us for a conversation with Governor Dannel Malloy as he discusses the successes and challenges of accomplishing school reform at the state level.
Join AEI in welcoming Michael Rubin for a Bradley Lecture discussing his upcoming book “Dancing with the devil: Lessons from negotiating with rogues and terrorists.”
At the Philanthropic Freedom Project's inaugural public event, AEI President Arthur Brooks will present his new research on how charitable giving has changed in the United States in the wake of the Great Recession and how those changes have serious ramifications for future tax policy.
The Air Force Association’s Mitchell Institute and AEI’s Marilyn Ware Center for Security Studies invite you to a forum with the 18th Air Force Chief of Staff General T. Michael Moseley (ret.) to discuss the imperative for air power in an increasingly uncertain world.
Thie event will address the economic implications of cultural fragmentation, the perception of capitalism in Western culture, and how economists can incorporate cultural considerations into their analyses.