Laura C. Murphy

This paper investigates the role of liquidity constraints in shaping loan term choices within the auto loan market, a major component of household debt in the United States. I address two key features of auto loan term lengths in the U.S.: their substantial cross-sectional heterogeneity and the notable rise in average term lengths over time. Using data from the Federal Reserve Bank of New York/Equifax Consumer Credit Panel, along with supplemental income and price data, I establish a causal link between liquidity constraints and loan term lengths, demonstrating that much of the cross-sectional variation in term lengths can be attributed to differences in liquidity constraints among borrowers. To further analyze these patterns, I develop a quantitative model of term length choice, showing that access to longer loan terms enables borrowers to smooth consumption and manage debt more effectively. Through this model, I also demonstrate that while time-series variation in liquidity constraints alone does not fully account for the increase in term lengths, the narrowing gap between interest rates on debt and savings, when interacted with liquidity constraints, has contributed to the observed trend toward longer loan maturities.

We study how demographic changes in the US affect men’s lifetime incomes through career spillovers. American men’s lifetime median incomes have followed a hump-shaped pattern: rising with each cohort entering the labour market from the late 1950s until the 1970s and subsequently falling. The start of the decline coincides with the entry of the baby boomers, who represent a structural break in the size of incoming cohorts. The availability of higher-compensated management tasks increases with the number of lower-ranked (younger) workers. So, a larger cohort of workers will increase (decrease) the opportunities of their predecessors (successors), in contrast to the symmetric effect predicted by traditional models. We utilize a simple model to show how cross-cohort differences in promotions to higher-rank jobs can account for the shape of lifetime median incomes observed in the data. We also show the promotion mechanism is consistent with several other cross-cohort empirical facts.

We study women’s labor market participation in England between 1851 and 1911 using newly digitized census microdata. We document three novel facts. First, women’s labor force participation rate slightly decreased between 1851 and 1911, driven by a 40% decrease among married women. Secondly, examining synthetic cohorts reveals that the drop in married women’s labor force participation is driven by younger cohorts choosing not to join the workforce, rather than older cohorts exiting at increasing rates. Lastly, we observe that women were predominantly employed in the textile and domestic service sectors. Our theoretical model suggests that increasing societal barriers may have influenced married women’s labor market engagement over time.

Women enroll in college at substantially higher rates than men, yet experience worse post-college outcomes, including lower earnings, lower labor supply, and higher student debt balances. This paper studies the role of gender differences in non-college labor market opportunities in shaping college enrollment, student debt, and aggregate gender inequality. We show that women’s higher matriculation rates are concentrated in lower-income areas where non-college outside options are weaker, and that women disproportionately attend lower-quality, lower-cost institutions while still accumulating more student debt and earning less after graduation. We further provide preliminary causal evidence that improvements in non-college earnings reduce college enrollment, with larger effects for women. To interpret these findings, we develop a model of college and career choice in which worse outside options raise the net return to college, increasing enrollment and debt even when post-college earnings remain lower. The framework highlights how changes in non-college labor markets can generate opposing movements in female welfare, the college earnings premium, and aggregate gender earnings gaps through compositional effects, with important implications for higher education and student debt policy.