Buy Now Pay (Less) Later: Leveraging Private BNPL Data in Consumer Banking, with Christine Laudenbach, Elin Molin and Talina Sondershaus [Link to SSRN]

[Cited in The Economist, August 4, 2025]

Buy Now, Pay Later loans (BNPL) are an increasingly popular way to finance small-ticket purchases. We provide new evidence on how BNPL influences regular bank credit markets, benefiting both lenders and borrowers through information production and learning. Using data from over one million unsecured bank loan applications from a bank that also provides BNPL services, we exploit the fact that BNPL enhances the bank’s ability to assess creditworthiness by incorporating transaction data beyond shared credit registers. We establish four key findings. First, BNPL users are more likely to be approved for bank loans due to lower internally assessed credit risk, while those with late BNPL payments face lower approval rates. Second, BNPL customers benefit from discounted interest rates, while the bank earns a profit margin by price discriminating among customers with a good internal payment history but differing external credit scores. Third, customers with a BNPL history exhibit better repayment behavior and lower default rates, partly driven by improved loan terms. Fourth, learning effects from prior BNPL use likely reinforce this behavior. Our findings suggest that BNPL improves risk assessment and fosters learning, enhancing credit outcomes and access for higher-risk borrowers, thereby promoting financial inclusion. 

"The Price of Leverage: Learning from the Effect of LTV Constraints on Job Search and Wages" , with Gazi Kabas, March 2023 [Link to SSRN]

Does household leverage matter for workers’ job search, matching in the labor market, and wages? Theoretically, household leverage has been shown to have opposing effects on the labor market through, among others, a debt-overhang and a liquidity constraint channel. To test which channels dominate empirically, we exploit the introduction of a macroprudential borrowing restriction that exogenously reduces household leverage in Norway. We study home-owners who lose their job and find that a reduction in leverage raises wages by 3.3 percentage points after unemployment. The mandated restriction of leverage enables workers to search longer for jobs, and thereby find positions in firms that pay higher wage premia and switch to new occupations and industries. We observe no evidence that a greater use of credit during unemployment drives the extended job search. The positive effect on wages is persistent and more pronounced for workers who are more likely to benefit from improved job search, such as young people. Our findings contribute to the debate on the costs and benefits of policies that constrain household leverage and show that such policies, while primarily aiming at enhancing financial stability, have other positive effects such as improved labor market outcomes.

An early version of this paper circulated as "Household Leverage and Labor Market Outcomes Evidence from a Macroprudential Mortgage Restriction".

Make it or Break it: Corporate Bankruptcy and Management Careers, with Morten Grindaker and Andreas Kostøl [paper at SSRN] [previously circulated as: Executive Labor Market Frictions, Corporate Bankruptcy and CEO Careers ](Revise and resubmit, Management Science)

Featured on Harvard Law School bankruptcy roundtable and Finansavisen 

The extent to which a corporate bankruptcy can shift the career trajectory of managers has important implications for high-skilled labor markets but has proven difficult to measure. By combining an instrumental variable approach with the random assignment of judges who differ in their propensity to liquidate firms, this paper offers novel evidence for small and medium-sized business CEOs’ careers. We show that these CEOs, when displaced in bankruptcy, are 30 pp less likely to remain in the executive labor market, experience a temporary fall in labor earnings, and a persistent, near elimination of capital income. However, displaced CEOs are quickly re-employed and move to better-paying firms, although often in lower-ranked positions. Taken together, our evidence shows that CEOs can make or break their executive careers due to bankruptcy events that are beyond their control. We explore heterogeneity in effects and find that bankruptcy is most detrimental for longer-tenured CEOs and when a case is petitioned during times at which bankruptcy rates are low. Our findings are consistent with models of firm-specific human capital and statistical discrimination, where the labor market uses bankruptcy as a (negative) signal of managerial ability. 

What Do12 Billion Card Transactions Say About House Prices and Consumption?, with Knut Are Aastveit,  Jesper Böjeryd, Magnus Gulbrandsen and Ragnar Juelsrud [Norges Bank Working Paper]  

[Cited in Norges Bank's Financial Stability Report, November 2025]

We study how changes in housing wealth affect household spending using administrative and granular, de-identified, data on debit card payments and e-invoices for the near population of Norway. We focus on the 2014 oil-price collapse, which created sharpregional variation in house prices. Comparing government workers in oil and non-oil regions, we estimate a three-year marginal propensity to spend (MPX) of about 3.6 cents per dollar. The response is highly concentrated in durables, home improvements, furnishings, and vehicles, and primarily driven by a reduction in the uptake of credit backed by home-equity. The local MPX (L-MPX), the share of the total spending response accruing to locally produced goods and services, stands for roughly 80% of the consumption decline. Additional findings highlight both collateral and wealth effects as key channels linking housing wealth to consumption, and document that household balance-sheet heterogeneity shapes the propagation of housing-wealth shocks. 

Cross-Border Bank Flows, Regional Household Credit Booms and Bank Risk-Taking, with Dominik Boddin and Daniel te Kaat (Revise and resubmit, AEJ Macro)

In this paper, we study the consequences of the increase in bank inflows after the ECB's implementation of non-conventional monetary policy in 2014/15 on household lending. For this purpose, we employ granular household survey data matched with supervisory bank data from Germany and estimate difference-in-differences regressions around this increase in bank inflows. We show that the inflow of liquidity from abroad induced more exposed banks, i.e., those with greater initial non-core funding ratios, to increase their consumer loan supply to low-income households. Mortgage lending is largely unaffected by bank flows. We also document that consumer expenditures by more exposed households rise simultaneously. our findings  speak to the capital flow-bank risk-taking nexus by providing new evidence at the household level. [SSRN link]

Credit Information, Discipline and Strategic Behavior by Firms, with Marieke Bos and Paola Morales, 2018 

Credit bureaus in many countries restrict the length of time that negative credit information of firms can be retained. The large variance in retention times across countries illustrates the lack of consensus on the optimal memory of negative information. By exploiting a variation in retention time of negative information for firms, provided by the introduction of the Habeas Data law in Colombia, we are able to analyze the causal link between the length of credit bureaus’ retention time and the subsequent behavior of lenders and borrowers. The law was ratified in 2009 and prohibited institutions in Colombia from accessing the entire credit history of borrowers. Since then, negative credit information is observably only for periods determined by the length of the delinquency period. Our results suggest that after the introduction of the Habeas Data law: i) the duration of loan delinquency periods is longer, ii) firms seem to strategically wait until their negative records disappear from the credit bureaus, before switching banks, iii) banks grant loans with higher interest rate spreads, lower collateral requirements, larger loan amounts and longer maturities. In addition, we find empirical evidence of both ex ante and ex post theories of collateral.

An earlier version of this paper circulated as "The Impact of Sharing Credit Information, Evidence from a Quasi-Experimental Variation"

Inherited Hardship or Learned Behavior? Nature vs. Nurture in Financial Distress, with Marieke Bos, Elin Molin, Erik Plug and Paula Roth, (draft coming soon)

Financial distress has severe negative consequences for individuals and families, yet its intergenerational persistence remains poorly understood. Using rich administrative data from Sweden, we examine whether children whose parents experience financial distress are more likely to face similar challenges themselves. Leveraging an adoption design that separates genetic from environmental influences, we find that both nature and nurture matter, but the environment in which a child is raised is more than three times as important as inherited traits in explaining financial distress. Observable characteristics, particularly low liquid assets, account for around half of the observed transmission. Our findings underscore the causal impact of family environments on financial hardship and highlight the potential of targeted policies, such as debt relief and financial education, to break the cycle of intergenerational financial distress. 

The Labor Market Effects of Carbon Pricing, with Andreas Fuster, Gazi Kabas and Vincenzo Pezone, (draft coming soon)

We study how carbon prices affect labor market outcomes by exploiting a policy change in the EU Emissions Trading System that led to a sharp rise in permit prices. Using population-wide employer-employee matched data from the Netherlands and a matched difference-in-differences design, we find no adverse aggregate effects on employment or wages. However, the distributional effects are sizable: workers in firms with large permit surpluses experience wage gains, as do STEM-educated workers---especially those with stronger outside options. Plants employing more STEM workers achieve larger reductions in energy costs, highlighting the role of skills in facilitating the transition to low-carbon technologies. Our results illustrate that distributional effects of carbon pricing depend on market design and worker skills. 

Giving up on the Home? How Downpayment Requirements Shape Consumption and Saving, with Yann Cerasi, Gazi Kabas and Steven Ongena (draft coming soon)

We study how households adjust consumption following the introduction of a loan-to-value (LTV) restriction using population-wide electronic expenditure records and administrative data. We find that renters increase consumption as a result of the policy, at odds with the policy’s objective to further financial stability through greater down payments and household savings. As mandatory down payments make home purchases more difficult, prospective buyers delay or give up on both home-ownership and the savings required for a down payment. This effect is robust to within-renter comparisons and is strongest in regions where the LTV restriction binds more. In contrast, households that purchase under the constraint reduce expenses before buying and keep them persistently lower thereafter. Our findings show that borrower-based macro-prudential policies can reshape intertemporal behavior in unintended ways, with important implications for home ownership, aggregate demand, and the transmission of housing regulation to the real economy. 

When Your Bank Leaves Town: Losing Soft Information in Brick-and-Mortar Branches with Jin Cao, Ismael Moreno and Marina Sanchez del Villar

We show that bank office closures negatively impact the wealth and credit availability of households. Using a new dataset with detailed information of each bank office closure and the universe of bank-household relationships in Norway between 2003 to 2019, we explore how losing physical access to one's bank affects customers' housing and wealth. We find that when a bank closes its offices in a municipality, clients wealth, likelihood of having debt and home ownership fall significantly compared with those whose banks maintained their local branches. Our findings stress that local brick-and-mortar bank offices still play an important role for households' finances and economic decision-making, well beyond their importance for small businesses.