The contemporary emergence of payday lending as a major source of high-cost short-term credit for credit-constrained populations has prompted debates among government officials, business representatives, advocacy groups and academics over how best to regulate the industry. Such debates typically focus on the prevailing lending practices and interest charges in the industry. While critics associate these with usury, supporters of payday lenders defend them as appropriately priced responses to market demand. This dissertation seeks to contextualize, and contribute to a deeper understanding of, the terms of these debates through an exploration of the recently concluded political exercise in Canada where responsibility for the governance of payday lending has been shifted from the federal government, with its criminal law power over usury, to provincial governments with their various regulatory powers over licensing and consumer protection. The dissertation begins with the observation that there are competing moral discourses about money and interest simultaneously embedded in the financial policy-making process in Canada, a fact that has complicated regulatory efforts aimed at payday lending. While these efforts have largely been informed by varying assessments of the transparency and competiveness of the payday lending market, this dissertation contends that a conceptually more useful way of understanding this market is to study the organizational and marketing strategies employed by payday lenders to indentify and retain a stable customer base, and the reciprocal moves on the part of customers to improve upon their terms of trade. In detailing the political process which culminated in a new regulatory regime for payday lending, this dissertation draws on the “regulation through networks” literature to help explain its progress. A major contribution this dissertation makes to this explanatory approach is in its emphasis on the dual legitimation imperatives with which the network actors had to contend as they negotiated their way to a consensus on a politically acceptable regulatory structure for payday lending. This consensus has proved to be politically vulnerable because of the continuing normative conflicts embedded in official financial policy discourse, and inter alia, in the legitimation imperatives which have permeated the policy-making process.

The contemporary emergence of payday lending as a major source of high-cost short-term credit for credit-constrained populations has prompted debates among government officials, business representatives, advocacy groups and academics over how best to regulate the industry. Such debates typically focus on the prevailing lending practices and interest charges in the industry. While critics associate these with usury, supporters of payday lenders defend them as appropriately priced responses to market demand. This dissertation seeks to contextualize, and contribute to a deeper understanding of, the terms of these debates through an exploration of the recently concluded political exercise in Canada where responsibility for the governance of payday lending has been shifted from the federal government, with its criminal law power over usury, to provincial governments with their various regulatory powers over licensing and consumer protection. The dissertation begins with the observation that there are competing moral discourses about money and interest simultaneously embedded in the financial policy-making process in Canada, a fact that has complicated regulatory efforts aimed at payday lending. While these efforts have largely been informed by varying assessments of the transparency and competiveness of the payday lending market, this dissertation contends that a conceptually more useful way of understanding this market is to study the organizational and marketing strategies employed by payday lenders to indentify and retain a stable customer base, and the reciprocal moves on the part of customers to improve upon their terms of trade. In detailing the political process which culminated in a new regulatory regime for payday lending, this dissertation draws on the “regulation through networks” literature to help explain its progress. A major contribution this dissertation makes to this explanatory approach is in its emphasis on the dual legitimation imperatives with which the network actors had to contend as they negotiated their way to a consensus on a politically acceptable regulatory structure for payday lending. This consensus has proved to be politically vulnerable because of the continuing normative conflicts embedded in official financial policy discourse, and inter alia, in the legitimation imperatives which have permeated the policy-making process.

This dissertation contains three essays on topics including crime, credit constraints, education, athletics and health. Tying the works together is a set of empirical tools that have come to define the field of labor economics and the pursuit of causal inference. Chapter II contains an analysis of the effects of a school-based incentive program on children's exercise habits. The program offers children an opportunity to win prizes if they walk or bike to school during prize periods. I use daily child-level data and individual fixed effects models to measure the impact of the prizes by comparing behavior during prize periods with behavior during non-prize periods. Variation in the timing of prize periods across different schools allows me to estimate models with calendar-date fixed effects to control for day-specific attributes, such as weather and proximity to holidays. In Chapter III, I present evidence of the causal effects on crime of access to small, high cost, short term consumer credit, known as payday lending. Using within-state geographic as well as inter-temporal variation in access to payday loans, I estimate the effect of access to payday lending on all types of crime. I find a substantial effect only for financially motivated offenses, with access to payday lending leading to approximately five additional arrests per 100,000 residents monthly. The estimated effects are concentrated in larceny, fraud, and forgery. The final chapter turns back to education to assess high school athletics' role in affecting athletes' attendance patterns. The key result that emerges from the analysis is that in-season athletes miss significantly less school relative to athletes out-of-season. School absences in boys decline by nearly 8% as a result of being in-season, though the effects are much larger for black boys, particularly with respect to unexcused absences. Paying careful attention to issues of identification, this dissertation presents three essays contributing to the literature broadly categorized as labor economics. Each seeks to understand the role of changing incentives and opportunities on individuals' decision making processes, in order to inform policy makers wishing to craft effective public policies. This dissertation includes previously published co-authored material. / 10000-01-01

This research is empirical and exploratory in nature. It examines the emergence of a market of underserviced consumers within the U.S. banking subsector of the financial services industry. The aim of this research is to introduce generalizable sociological theory that explains the formation of an underserviced consumer market. This new social theory called Underserviced Consumer Market Formation Theory (UCMFT) is then applied to the U.S. banking subsector of the financial services industry in order to address the research question of, Why has an emerging market of underserviced consumers formed within the U.S. banking subsector of the financial services industry? In addition to introducing UCMFT to academia, other contributions to knowledge have materialized as a means of explaining this phenomenon and answering the research question of this study. These additional contributions to knowledge are: introducing the term underserviced consumer within the U.S. banking subsector of the financial services industry and introducing a theoretically based explanatory model specific to this subject matter of this research termed the model of underserviced consumer market formation within the U.S. banking subsector of the financial services industry. Positioning UCMFT for future research and generalizability includes clearly defining the industry being studied, clearly defining the term underserviced consumers in the context of the industry being studied, and empirically identifying and linking the unique psychosocial characteristics to the predominant consumers (buyers) within the industry being studied or encompassed by the research. Potential industries that could be included for future research grounding in UCMFT are healthcare, technology, telecommunications, education, as well as other subsectors within the financial services industry. Overall, the empirical findings support the creation of the theory and its applicability to the U.S. banking subsector of the financial services industry as scoped for this research.

This thesis examines the regulation and development of the moneylending and pawnbroking markets in Britain since the 1870s. The six regulatory episodes examined illustrate how the role of state intervention in these markets has been debated, and how it has evolved. The thesis asks: what were the motivations for reform, which market features were regulators most concerned with, and what were their proposed solutions? It demonstrates how majority and minority viewpoints have informed regulation and documents the often-conflicting expectations of how regulation was meant to influence lending decisions, borrower outcomes and poverty. By identifying the primary motivating factors behind regulation, the study answers why and how some policymakers sought to restrict low-income borrowers from gaining access to credit. It finds that policymakers have shifted their focus from market competition and freedom of consumer choice towards financial inclusion and poverty reduction. The result is a better understanding of the regulation and development of two credit products that were, and remain, vital to the working class. This research shows that the motivations for reform have varied over time. In 1872, 1900, 1927, 2006 and after the Great Recession, policymakers sought to restrict ‘illegitimate, evil and predatory’ small loan lenders, who were accused of exacerbating the conditions of the poor. In 1974, policymakers sought enhanced regulation such as information disclosure to increase market competition and decrease the cost of borrowing. In 2014, the FCA believed that the payday loan market still lacked price competition and implemented price controls as a corrective measure. Less varied were the issues of concern and proposed solutions. This research identifies five main areas of regulatory concern: the high cost of loans, advertising, the use of an annual percentage rate (APR), the legitimacy of moneylenders and pawnbrokers in the financial system and regulatory enforcement. It identifies three main policy responses: price controls, information disclosure and licensing. By analysing the motivations, debated issues and proposed solutions, this research examines wider questions concerning freedom of contract, borrower rationality, bargaining inequity, market segmentation and credit rationing. It contributes to the scholarly and policy dialogue on price controls, information disclosure and the development of non-bank lending. This research also provides new perspectives on the Victorian poverty debate and the modern financial inclusion agenda as they relate to the interaction between regulation, high-cost credit and poverty.