Working Paper: NBER ID: w28611
Authors: Lasse Brune; Eric Chyn; Jason T. Kerwin
Abstract: We study a simple savings scheme that allows workers to defer receipt of part of their wages for three months at zero interest. The scheme significantly increases savings during the deferral period, leading to higher post-disbursement spending on lumpy goods. Two years later, after two additional rounds of the savings scheme, we find that treated workers have made permanent improvements to their homes. The popularity of the scheme implies a lack of good alternative savings options. The results of a follow-up experiment suggest that demand for the scheme is partly due to its ability to address self-control issues.
Keywords: No keywords provided
JEL Codes: D14; D9; D90; J22; J33; O12; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Access to the deferred wages scheme (J38) | Increased savings during the deferral period (D15) |
| Increased savings during the deferral period (D15) | Higher post-disbursement spending on lumpy goods (E20) |
| Increased savings during the deferral period (D15) | Increased likelihood of having metal roofs two years later (R21) |