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Credit constraints are central to development economics theory. However, there is scant direct evidence that supports the existence of such constraints. Traditional tests observe how consumption changes after an unexpected income shock. Such changes can also result from myopic behavior or...
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perceived risk of allegations. Using media reports on allegations against teachers as shocks to perceived risk, I find for every … five reports occurring in a region, teachers are 2.5 percentage points more likely to be members in the subsequent year …. These effects are larger when teachers share characteristics with the news story and explain 45 percent of the growth in …
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