MEASURING THE EQUILIBRIUM IMPACTS OF CREDIT: EVIDENCE FROM THE INDIAN MICROFINANCE CRISIS

• 成果类型: Article
• 署名作者: Breza, Emily; Kinnan, Cynthia
• 署名单位: Harvard University; National Bureau of Economic Research; Tufts University
• 刊物名称: QUARTERLY JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0033-5533
• DOI: 10.1093/qje/qjab016
• 发表日期: 2021
• 页码: 1447-1497
• 关键词: randomized-controlled-trial; LIQUIDITY SHOCKS EVIDENCE; microcredit evidence

摘要

In October 2010, the state government of Andhra Pradesh, India, issued an emergency ordinance, bringing microfinance activities in the state to a complete halt and causing a nationwide shock to the liquidity of lenders, especially those with loans in the affected state. We use this massive dislocation in the microfinance market to identify the causal impacts of a reduction in credit supply on consumption, earnings, and employment in general equilibrium in rural labor markets. Using a proprietary district-level data set from 25 separate, for-profit microlenders matched with household data from the National Sample Survey, we find that district-level reductions in credit supply are associated with significant decreases in casual daily wages, household wage earnings, and consumption. We find a substantial consumption multiplier from credit that is likely driven by two channels-aggregate demand and business investment. We calibrate a simple two-period, two-sector model of the rural economy that incorporates both channels and show that the magnitude of our wage results is consistent with the model's predictions.