The effect of government cash assistance on household credit access and use

Project Summary:

This team of young, promising applied economists seeks to quantify how public assistance affects households’ financial well-being through increasing access to credit. We know little about the interactions between social safety net programs and the financial well-being of families. This paper uses a credible and proven research design to provide new evidence to better our understanding of the role of credit markets in the lives of the poor. By matching individual credit data to administrative data, the authors will estimate the effects of removing low-income youth with disabilities from Supplemental Security Income on credit access, secured borrowing, and payday loan borrowing for the youth and their families. There is great interest in this broad subject, and precious few ways to tease out causal impacts. Yet with cutting-edge methods and use of administrative data, the authors will attempt to do so.


Manasi Deshpande is an assistant professor of economics at the University of Chicago Department of Economics. Her research interests are empirical public finance and labor economics, with a focus on the effects of social insurance and public assistance programs and their interaction with labor markets. She received her Ph.D. in Economics from MIT and graduated from the University of Texas with a B.A. in Economics, Mathematics, and Plan II Honors (Humanities). She has worked as a policy advisor for the White House National Economic Council and as a research assistant for the Hamilton Project at Brookings.