State-level Payday Loan Bans and Preterm Births in the US, 2000-2019

Payday loans refer to high-interest, short-term loans. These loans can provide immediate financial relief for individuals with limited access to traditional credit. However, the predatory nature of payday loans may portend increased financial strain and adverse public health consequences.

We examine whether state-level temporal variation in payday loan restrictions over a 20-year period (2000-2019) corresponds with a reduction in preterm births: a leading cause of infant mortality in the United States (US). Between 2000 and 2019, 10 US states and the District of Columbia imposed restrictions on payday lending at varied time points. We use data on preterm births provided by the Centers of Disease Control's WONDER database (2000-2019) and apply staggered difference-in-difference approaches to examine whether preterm births (per 100 live births) declined among states that imposed payday lending restrictions, relative to states that never imposed restrictions. We also control for state-specific time propensity of preterm births, derived through time-series analysis.

Results indicate a decline in the preterm births by approximately 0.22 per 100 live births (95% confidence interval: -0.31, -0.13) within the first 3 years of payday loan restrictions, which corresponds to 4512 fewer than expected preterm births.

Our findings are consistent with the hypothesis that state-level payday lending restrictionsare associated with a reduction in preterm births.