Jen Brown and David Matsa. January 2019. “Locked in by Leverage: Job Search during the Housing Crisis” (now forthcoming in the Journal of Financial Economics)
ABSTRACT: This paper examines how housing market distress affects job search. Using data from a leading online job search platform during the Great Recession, we find that job seekers in areas with depressed housing markets apply for fewer jobs that require relocation. With their search constrained geographically, job seekers broaden their search to lower-level positions nearby. These effects are stronger for job seekers with recourse mortgages, which we confirm using a spatial regression discontinuity analysis. Our findings suggest that housing market distress distorts labor market outcomes by impeding households’ ability to move.
Jen Brown and Mark Jansen. June 2019. “Consumer Protection Laws in Auto Lending”
ABSTRACT: We examine the impact of consumer protection laws on loan terms and outcomes in auto financing. We find that dealers strategically adjust contracts such that similar borrowers face the same monthly payments in states with and without usury laws. However, monthly payments are higher in states that prohibit post-default collection through wage garnishment. Default rates do not vary with usury law when lenders can seek deficiency payments; however, consistent with both moral hazard and the constraints imposed by households' limited liquidity, default rates are higher where wage garnishment is prohibited. Although wage garnishment laws benefit borrowers who default, we find evidence that those who pay their debt in full face higher total observable loan costs where wage garnishment is prohibited.
Anne Boring and Jen Brown. 2019. “Gender, Competition, and Choices in Higher Education” [email to request most recent version]
Phil Brookins, Jen Brown, and Dmitry Ryvkin. August 2019. “Peer Information and Risk Taking under Competitive and Non-competitive Pay Schemes”
ABSTRACT: Incentive schemes that reward participants based on their relative performance are often thought to be particularly risk-inducing. Using a novel, real-effort task experiment in the laboratory, we find that the relationship between incentives and risk-taking is more nuanced and depends critically on the availability of informa- tion about peers’ strategies and outcomes. Indeed, we find that when no peer information is available, relative rewards schemes are associated with significantly less risk-taking than non-competitive rewards. In contrast, when decision-makers receive information about their peers’ actions and/or outcomes, relative incentive schemes are associated with more risk-taking than non-competitive schemes. The nature of the feedback—whether subjects receive information about peers’ strategies, outcomes, or both—also affects risk-taking. We find no evidence that competitors imitate their peers when they face only feedback about other subjects’ risk-taking strategies. However, decision-makers take more risk when they see the gaps between their performance score and their peers’ scores grow. Combined feedback about peers’ strategies and performance—from which subjects may assess the overall relationship between risk-taking and success—is associated with more risk-taking when rewards are based on relative performance; we find no similar effect for non-competitive rewards.
Jen Brown and Dylan Minor. August 2015. “Misconduct in Financial Services: Differences across Organizations” NBER Working Paper No. 18608
ABSTRACT: We examine misconduct in financial services. We propose a theory in which experts extract surplus based on the value of their firm’s brand and their own skills. Using sales complaint data for insurance agents, we find that agents working exclusively for large branded firms are more likely to be the subject of justified sales complaints, relative to smaller independent experts, despite doing substantially less business. In addition, more experienced experts attract more complaints per year.
Jen Brown and Jin Li. July 2010. “Going for it: The Adoption of Risky Strategies in Tournaments.”