The association between payday lending and economic well being, evidence from state level panel data from 1991-2013.

摘要

Payday lending, short-term loans for small amounts of money with high interest and fees, is a controversial practice. Many have argued that it creates cycles of debt that harm borrowers long-term economic well being. The research to this point has measured different outcomes of economic well being with mixed results. In this paper I use panel data from 1991 through 2013 for all states and Washington DC to measure the association between laws allowing payday lending and two measures of economic well being: income and the poverty rate. Although my results are largely mixed, contrary to the prevailing popular notion, I find some evidence that payday lending may be associated with benefits to economic well being.