Contract Terms, Employment Shocks, and Default in Credit Cards

We thank Stephanie Bonds, Felipe Brugués, Arun Chandrashekhar, Pascaline Dupas, Liran Einav, Marcel Fafchamps, Marco Gonzalez-Navarro, Dean Karlan, Asim Khwaja, Markus Mobius, Melanie Morten, Mauricio Romero, Carlos Serrano, Sirenia Vazquez, and Jon Zinman for their helpful comments. We thank Alan Elizondo, Carlos Serrano, David Jaume, Adalberto González and Daniel Chiquiar for useful conversations. We thank Ana Aguilar and Alan Elizondo for their support, and Luis Alberto Martinez Chigo and Nancy Flores Sosa for their help with the social security data. We thank seminar participants at Banco de Mexico, the Central Bank of Armenia, Columbia, ITAM, The Naval Postgraduate School, Stanford, UC Berkeley, Yale, USC, UC Merced, BREAD (May 2018), UC Davis, Barcelona GSE Conference (June 2018), HKUST, UConn, Penn State and Harvard-MIT. We would like to thank Bernardo Garcia Bulle, Roberto Gonzalez Tellez, Marco Medina, Alli Marney-Bell, Taegan Mullane, Abbie Natkin, Ryan Perry, Eduardo Rivera, and Isaac Meza for their outstanding research assistance. We thank the editor and the referees for their exceptionally constructive suggestions. Previous versions of this paper were circulated under the titles “Financial Inclusion with Credit Cards in Mexico” and “The Perils of Bank Lending and Financial Inclusion: Experimental Evidence from Mexico.” The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research, Banco de México, the Federal Reserve Bank of Chicago or the Federal Reserve System. AEA RCT Registry Identifying Number: AEARCTR–0003941. All errors are our own.

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