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WP202305-Labeled-loans-and-human-capital-investments.pdf
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Imperfect capital markets and commitment problems impede lumpy human capital investments. Labeled loans have been postulated as a potential solution to both constraints, but little is known about the role of the label in influencing investment choices in practice. We draw on a cluster randomized controlled trial in rural India to test predictions from a theoretical model, providing novel evidence that labeled microcredit is effective in influencing household borrowing and investment decisions and increasing take-up of a lumpy human capital investment, a toilet.
Authors

Associate Director
Britta is an IFS Associate Director, Associate Staff at the Department of Economics at the UC and Researcher at NIHR Obesity Policy Research Unit.

Research Associate Yale University, Stockholm University and FAIR/Norwegian School of Economics (NHH)
Bet is a Research Associate of the IFS who is an Adjunct Associate Professor at FAIR/Norwegian School of Economics (NHH).

Sara Giunti

Research Associate University of Kent
Bansi is a Research Associate of the IFS, a Senior Lecturer of Economics at the University of Kent and also a Fellow at the Global Labor Organisation.

Susanna Smets
Working Paper details
- DOI
- 10.1920/wp.ifs.2023.0523
- Publisher
- Institute for Fiscal Studies
Suggested citation
Augsburg, B et al. (2023). Labeled loans and human capital investments. 23/05. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/labeled-loans-and-human-capital-investments (accessed: 11 December 2023).
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