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University of Oregon economist tells committee earned‑wage access linked to short‑term income gains
Summary
Research presented to the committee showed first-time use of earned‑wage access was associated with an average $334 monthly increase in income in the first three months, with users typically accessing about $95 per transaction and spending it on necessities.
An academic presentation on earned‑wage access drew the committee’s attention to new evidence that the product can affect work incentives and household cash flow. Jonathan Davis, an associate professor of economics at the University of Oregon, testified using data from a major provider and peer-reviewed methods.
Davis said he compared early adopters with matched later adopters and found first‑time users experienced an average increase in monthly income of about $334 (roughly 11.5%) in the three months after first use. He and cited experimental work that found similar results driven by increases in hours worked.
"The new user's income increases by, on average, dollars 334 per month in the first 3 months after this use," Davis said, adding most accessed amounts average about $95 and are spent largely on necessities such as rent, gas and debt payments. He noted the provider’s fee model in his sample is voluntary (a tip model) and mandatory fees are $0, while there is a small statistically significant increase in insufficient‑funds fees — roughly one such fee per 15 uses.
Committee members noted the policy relevance and cross‑chamber activity on an earned‑wage concept; the chair said the House is also convening stakeholder work. Davis’s findings were presented for informational purposes; the committee did not take further action at the hearing.
