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The relationship between spend regularity and you can payday loans is actually, we feel, one another unique and you can essential for coverage

The relationship between spend regularity and you can payday loans is actually, we feel, one another unique and you can essential for coverage

Initial outcome of this investigation is that perpetual pay-day loan utilize may actually raise staff member passions, even: (1) which have seemingly higher interest rates, and you will (2) versus stochastic consumption shocks. Regardless if maybe counterintuitive, an important is the fact that the prolonged the newest gap between paychecks, the greater amount of volatile something special-biased worker’s consumption character.