It Takes Two to Borrow: The Effects of the Equal Credit Opportunity Act on Housing, Credit, and Labor Market Decisions of Married Couples.

The article examines the impact of the Equal Credit Opportunity Act (ECOA) of 1974, which prohibited gender- and marital-status-based discrimination in U.S. mortgage lending, specifically ending the practice of discounting half of a wife’s income in joint mortgage applications. Using difference-in-differences regressions on Panel Study of Income Dynamics data and event studies exploiting state-level variation, the study finds that the ECOA significantly increased mortgage borrowing, homeownership rates, and house size among married couples with working wives, enabling approximately 1.4 million households to become homeowners. Additionally, the reform positively influenced married women’s labor force participation, an effect supported and amplified by a calibrated life cycle model showing that counting the full wife’s income toward borrowing constraints raised women’s incentives to work, thereby further boosting homeownership and borrowing. The findings highlight the broader economic benefits of improving women’s access to credit and labor market inclusion, with implications for policy in countries lacking explicit laws against gender-based credit discrimination.