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Working Paper
Decomposing Gender Differences in Bankcard Credit Limits: Evidence from Sole Mortgage Applicants
Using linked mortgage application and credit bureau data, we document the existence of unconditional and conditional gender gaps in the distribution of total credit card limits for sole mortgage applicants. We estimate that male borrowers have approximately $1,300 higher total credit card limits than female borrowers. This gap is primarily driven by a large gender gap in the right tail of the limit distribution. At the median and in the left tail of the total limit distribution, women’s limits are approximately $100 to $300 higher than men’s. Results from a Kitagawa-Oaxaca-Blinder ...
Working Paper
Decomposing Gender Differences in Bankcard Credit Limits
In this paper, we examine if there are gender differences in total bankcard limits by utilizing a data set that links mortgage applicant information with individual-level credit bureau data from 2006 - 2016. We document that after controlling for credit score, income, and demographic characteristics, male borrowers on average have higher total bankcard limits than female borrowers. Using a standard Kitagawa-Oaxaca-Blinder decomposition, we find that 87 percent of the gap is explained by differences in the effect of observed characteristics between male and female borrowers, while ...
Discussion Paper
A Note on Gender Differences in Credit Card Limit Changes
Credit cards are the most widely held consumer debt product in the United States. Over 191 million Americans have at least one account (Haughwout et al., 2022) and nearly half of those with a credit card revolve a balance on at least one of their accounts (Federal Reserve Board, 2024).
Working Paper
Does Experience Matter? Past Fraud Experiences, Data Compromises, and Credit Market Behavior
We study how past experiences with fraud affect individuals’ likelihood of taking precautionary action in credit markets when faced with a new shock that raises their fraud risk. We focus on two kinds of past experiences with fraud: direct experience with fraud and a “near-miss” experience that increased fraud risk but did not directly lead to fraud. Using the 2017 Equifax data breach announcement, we show that individuals with either type of prior experience with fraud were more likely to take a precautionary action—freezing their credit report—than individuals with no prior ...
Working Paper
Prior Fraud Exposure and Precautionary Credit Market Behavior
We study how past experiences with privacy shocks affect individuals’ likelihood to take precautionary behavior when faced with a new privacy shock in the context of credit markets. We focus on experiences with identity theft and data breaches, two kinds of privacy shocks that either directly lead to fraud or put an individual at an elevated risk of experiencing fraud. We show that immediately after the announcement of the 2017 Equifax data breach, individuals with either kind of prior fraud exposure were more likely to freeze their credit report and close credit card accounts than ...
Working Paper
Financial Fraud Through the Lens of Extended Fraud Alerts
We use extended fraud alerts in anonymized credit reports to examine how identity theft, and subsequent clean-up, affects consumers’ credit outcomes. The immediate effects of fraud for these consumers are negative, relatively small, and transitory. After placing an alert, these consumers experience persistent declines in delinquencies and a 12-point increase in credit scores, and 11 percent of filers become prime consumers. Many of these consumers take advantage of their improved creditworthiness and obtain additional credit. Although alert filers have larger balances, their performance on ...
Working Paper
Hospital Billing Regulations and Financial Well-Being: Evidence from California’s Fair Pricing Law
We examine the financial consequences of the 2007 California Fair Pricing Law, which places a price ceiling on hospital bills for financially vulnerable individuals. Exploiting cross-sectional variation in exposure to the law, we estimate its impact on individual financial distress. We find that the law reduces the likelihood of incurring non-medical debt in collections by 19.8 percent and the number of non-medical collections by 39 percent for an individual living in a county with average exposure in California. In addition, we find suggestive evidence that the number of delinquent accounts ...
Working Paper
Does Experience Matter? Past Fraud Experiences, Data Compromises, and Credit Market Behavior
We study how past experiences with fraud affect individuals’ likelihood of taking precautionary action in credit markets when faced with a new shock that raises their fraud risks. We focus on two kinds of past experiences with fraud: direct experience with fraud and a “near-miss” experience that increased fraud risk but did not directly lead to fraud. Using the 2017 Equifax data breach announcement, we show that individuals with either type of prior experience with fraud were more likely to take a precautionary action — freezing their credit report — than individuals with no prior ...
Working Paper
Did the ACA's Dependent Coverage Mandate Reduce Financial Distress for Young Adults?
We analyze whether the passage of the Affordable Care Act's dependent coverage mandate in 2010 reduced financial distress for young adults. U sing nationally representative, anonymized consumer credit report information, we find that young adults covered by the mandate lowered their past due debt, had fewer delinquencies, and had a reduced probability of filing for bankruptcy. These effects are stronger in geographic areas that experienced higher uninsured rates for young adults prior to the mandate's implementation. Our estimates also show that some improvements are transitory because they ...
Working Paper
Financial Consequences of Identity Theft: Evidence from Consumer Credit Bureau Records
This paper examines how a negative shock to the security of personal finances due to severe identity theft changes consumer credit behavior. Using a unique data set of consumer credit records and alerts indicating identity theft and the exogenous timing of victimization, we show that the immediate effects of fraud on credit files are typically negative, small, and transitory. After those immediate effects fade, identity theft victims experience persistent, positive changes in credit characteristics, including improved Risk Scores. Consumers also exhibit caution with credit by having fewer ...