Filipe Correia

Publications

Research

Lending to Internet Strangers: Screening and Monitoring under Borrower Anonymity
with António Martins and Anthony Waikel 

[Paper] Under Review

We study online informal lending among anonymous individuals conducted without contracts, collateral, or legal enforcement. Using data on requests, funding, performance, and matched surveys, we show that pseudonymous identities build trust through repeat borrowing and reputation through verified repayment. Higher prices substitute credit history for first-time borrowers, increasing the chances of funding. Within funded loans, we observe a positive price-default gradient. Overlap in borrowers’ and lenders’ online activity predicts both funding and repayment, suggesting that shared culture substitutes for geographic or social proximity. Connectedness matters for ex-ante screening rather than ex-post monitoring. This market intermediates millions, and profits concentrate among few lenders.

The Online Payday Loan Premium with Peter Han and Jialan Wang

[Paper] Under Review

Payday lenders offer identical prices to observably different borrowers. We document a $4 per $100 (≈100 p.p. APR) "online premium." Using data for storefront and online payday loans, we find that observably similar borrowers pay higher prices and default more online. Adverse selection drives this equilibrium. In our model, online and storefront lenders differ in cost structure, borrower risk, and price sensitivity. Low-risk borrowers are more price-sensitive and choose storefronts, while online lenders attract riskier borrowers. The online premium reflects higher costs in online lending and a gap in credit risk amplified by adverse selection.

Timing Matters: Evidence from Government Benefit Schedules with Marco Bonomo, Felipe Tomkowski, and Lucas Iten Teixeira

[Paper]

We study how the calendar timing of income affects credit card borrowing and delinquency. In a model of present-biased consumers with fixed monthly expenses, liquidity declines over the paycycle, leading to greater reliance on short-term credit among households paid later in the month. Using administrative microdata linking Brazil’s credit registry to the Bolsa Família program, which quasi-randomly assigns payment dates, we exploit rotation in the benefit calendar that preserves the order of pay across individuals, to separately identify paycycle and timing effects. Credit card borrowing and delinquency increase steadily as liquidity depletes, and later-paid households are 10% more likely to revolve debt and default more often. These findings reveal that even small differences in the timing of income, holding level and frequency constant, systematically shape household liquidity, debt accumulation, and financial fragility.

Is Corporate Credit Risk Propagated to Employees? with Gustavo Cortes and Thiago Christiano Silva  

[Paper]

As rising household debt became a widespread global phenomenon, understanding the sources of consumer credit risk has been crucial for financial and macroeconomic stability. We analyze employer-employee relationships from the perspective of banks to study the financial linkages between a firms’ credit conditions and their employees’ credit outcomes. We combine administrative credit registry data with the universe of labor contracts in Brazil to investigate if credit risk spills over from firms to their employees. We find that employees of credit-rating-downgraded companies have access to 20% less and 10% more expensive credit, compared to similar employees of non-downgraded firms. Downgraded-firm workers are also 5 p.p. more likely to default on loans compared to employees from unaffected publicly-listed firms. These negative financial effects have real consequences and are larger for non-executive personnel, who cut 9% on consumption following the downgrade. Finally, we document that banks price an employee’s risk of unemployment after an employer’s downgrade since these effects are one order of magnitude stronger for “payroll loans,” i.e., credit taken against a worker’s salary.

Spend to Save or Save to Spend? A First Look at Round-up Savings  with Bianca Putz
[Paper]
We study the spending changes upon enrollment in a round-up savings program on consumer spending behavior and financial outcomes. We find that upon enrollment in a round-up savings program, households increase their total spending. This effect is mainly driven by an increase in optional spending.  We use a difference-in-differences estimator to measure effects of round-up savings on consumer spending compared to non-enrolled households. We find that consumers increase their spending upon enrollment by approximately $90 per month in the post-enrollment window. Compared to a saving amount of approximately $15 per month after enrollment, these results suggest a short-run problematic effect of round-up savings on household finances, especially for financially constrained households. Our results show that especially lower-income households, who have the highest proportional effect in spending scaled by income, have a higher probability of experiencing canceled transactions, account overdrafts, and bounced checks after enrollment. 

The Role of Collateral in Auto Loan Asset-Backed Securities with Pekka Honkanen

Permanent Working Papers

Portugal’s Memorandum: Higher Understanding, Lower Drug Prices, with Pedro Pita Barros

Consumer Spending in the Coronavirus Outbreak, with Jialan Wang

The Value of a Heartbeat: Retirement Choices and Cardiovascular Health, with Sara R. Machado

In the Media

CNBC's Getting paid Wednesdays instead of Fridays makes me feel like I earn more.

My Q&A with WalletHub on secured credit cards.