Numeracy and the quality of on-the-job decisions: Evidence from loan officers

Author
Brown, Martin · Kirschenmann, Karolin · Spycher, Thomas
Published 2017
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Abstract

We examine how the numeracy level of employees influences the quality of their on-the-job decisions. Based on an administrative dataset of a retail bank we relate the performance of loan officers in a standardized math test to the accuracy of their credit assessments of small business borrowers. We find that loan officers with a high level of numeracy are more accurate in assessing the credit risk of borrowers. The effect is most pronounced during the pre-crisis credit boom period when it is arguably more difficult to pick out risky borrowers.

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Details

Title
Numeracy and the quality of on-the-job decisions: Evidence from loan officers
Author
Brown, Martin · Kirschenmann, Karolin · Spycher, Thomas
Year
2017
Published
2017
Type
Research Paper
Language
eng
Keywords
Behavioral Banking · Numeracy · Loan Officers · Screening · Banks · Other Depository Institutions · Micro Finance Institutions · Mortgages · Human Capital · Skills · Occupational Choice · Labor Productivity
This is Version 1 of this record. We added this version on August 6, 2017. This version is based on an original data import from RePEc.