Advancement to Candidacy Presentation: “The Effect of Temporary Formal Employment on Financial Well-Being: Evidence from Multiple Lotteries”, Camila Paleo

Speaker

Camila Paleo, University of California, Santa Barbara

Biography

Camila Paleo is a fourth-year PhD student in Economics at UCSB, and an affiliate of the Broom center for demography at UCSB. She obtained her BA and Master’s degree in Economics from Universidad de la República, in Uruguay. Her research focuses primarily on Labor Economics, with special interest in health, gender, and public policy. Previous work has studied the effect of a Conditional Cash Transfer program on demographic outcomes, mainly the transition to adulthood. Her current research focuses on the effect of a public employment program on financial well-being.

Event Details

Camila will be presenting her Advancement to Candidacy paper, “The Effect of Temporary Formal Employment on Financial Well-Being: Evidence from Multiple Lotteries”. To access the Advancement paper, you must have an active UCSB NetID and password.

Abstract and JEL Codes

This paper examines the impact of a public works program in Uruguay on participants'; financial well-being. Using lottery-based random assignment and high-quality credit panel data from the Central Bank of Uruguay, we estimate the intention-to-treat effects of the program on consumer credit outcomes. Our findings suggest that the program improves access to credit up to 1.5 years after its start, with the group selected to enter the program being 3.6% more likely to have an account. Heterogeneous analyses show that for some vulnerable populations, where barriers to formal credit might be higher, these effects are larger (13%) and longer lasting, persisting up to 2.5 years after the program. The increase in credit access occurred without increasing the probability of defaulting on payments, indicating overall improvements in financial well-being. Our findings show that, in contexts of low credit use and high informality, a short spell of formal employment can help individuals access formal credit.

JEL Codes: J48, G51, O54