Mobility Constraints and Labor Market Outcomes: Evidence from Credit Lotteries * Bernardus Van Doornik † Armando Gomes ‡ David Schoenherr § Janis Skrastins ¶ January 29, 2020 The views expressed in this paper are those of the authors and should not be cited to reflect the view of the Banco Central do Brasil. FOR INTERNAL USE ONLY. DO NOT CIRCULATE. Abstract In this paper, we examine the effect of individual mobility on labor market outcomes. We exploit exogenous time-series variation in individual mobility through credit lot- teries that randomly allocate credit designated for motorcycle purchase to participants of a financial product in Brazil. We find that upon access to a motorcycle, individu- als exhibit higher employment rates and earnings, and are more likely to start a new business. Consistent with an underlying mobility channel, we observe that individuals move to jobs further apart from their home and harder to reach by public transporta- tion. These effects are strongest for individuals residing in areas with less developed public transportation and sparse local labor markets. JEL Codes: D14, G23, J62, R20, R23. Keywords: access to credit, entrepreneurship, household finance, labor mobility, spatial mismatch. * We thank Deniz Aydin, Leah Boustan, Jonathan Cohn, Phil Dybvig, Maryam Farboodi, Dimas Fazio, Thomas Fujiwara, Radha Gopalan, Gregor Jarosch, Mina Lee, Jose Liberti, Alexandre Mas, Adrien Matray, Ben Moll, Jinfei Sheng, Sascha Steffen, Maria Micaela Sviatschi, Arlene Wong, and seminar participants at the Banco Central do Brasil, MIT, Princeton University, SSE Riga, University of Pittsburgh, Vanderbilt University, Washington University in St. Louis, and York University, and conference participants at the 29th European Summer Symposium in Financial Markets (Gerzensee), the 2018 UBC Winter Finance Conference, IFWSAS, the CEPR European Conference on Household Finance, and the International Conference on Banking and Economic Development (FGV Rio) for their many helpful comments and suggestions. † Banco Central do Brasil, Setor Bancario Sul Q.3 BL B - Asa Sul, Brasilia DF 70074-900, bernar- dus.doornik@bcb.gov.br ‡ Washington University in St. Louis, One Brookings Drive, St. Louis MO 63130, gomes@wustl.edu § Princeton University, 206B Julis R. Rabinowitz Building, Princeton NJ 08544, schoenherr@princeton.edu ¶ Washington University in St. Louis, One Brookings Drive, St. Louis MO 63130, jskrastins@wustl.edu