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Working Paper
Should defaults be forgotten? Evidence from variation in removal of negative consumer credit information
Practically all industrialized economies restrict the length of time that credit bureaus can retain borrowers? negative credit information. There is, however, a large variation in the permitted retention times across countries. By exploiting a quasi-experimental variation in this retention time, we investigate what happens when negative information is deleted earlier from credit files. We find that the loss of information led banks to tighten their lending standards significantly as the expected retention time was diminished from on average three-and-a-half to three years exactly. ...
Working Paper
Should defaults be forgotten? Evidence from legally mandated removal
Swedish law mandates the removal of information about past credit arrears from the individuals? credit reports after three years. By exploiting a quasi-experimental variation in retention times caused by a change in the credit bureau?s timing of arrear removal, we are able to examine the causal effect of increased retention time on consumers' short- to medium-run credit scores, loan applications, credit access, and future defaults.> We find that a prolonged retention time increases the need for and access to credit relative to shorter retention times. Additionally, prolonged retention times ...
Working Paper
Are We Overdiagnosing Mental Illnesses? Evidence from Randomly Assigned Doctors
Almost two in 10 adults in the U.S. and Europe are, at any moment in time, diagnosed with a mental illness. This paper asks whether mental illness is over- (or under-) diagnosed, by looking at its causal effect on individuals at the margin of diagnosis. We follow all Swedish men born between 1971 and 1983 matched to administrative panel data on health, labor market, wealth and family outcomes to estimate the impact of a mental illness diagnosis on subsequent outcomes. Exploiting the random assignment of 18-year-old men to doctors during military conscription, we find that a mental illness ...