Fintech to the (worker) rescue: Earned wage access and employee retention

Using data from a Mexican FinTech firm, the authors study the usage by workers of earned wages access. They find usage to be significant and concentrated towards the end of the pay cycle. They document that such usage is associated with a higher employee retention, suggestive of improved welfare. They consider the possible underlying mechanisms for a causal effect, liquidity insurance and catering to present-bias, and find empirical evidence supportive of both being at play for different segment of users.

  • Date: 08/04/2022
  • Sector: Any
  • Topics: Digital technology, Inclusive finance, Workers' rights
  • Regions: Americas
  • Resource type: Publications
  • Institutions: Harvard Business School