The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the PoorAdd to Calendar
2:00 pm – 3:30 pm
I use a field experiment in rural Kenya to study how temporary incentives to save impact long-run economic outcomes. Study participants randomly selected to receive large temporary interest rates on an individual bank account had significantly more income and assets 2.5 years after the interest rates expired. These changes are much larger than the short-run impacts on experimental bank account use and almost entirely driven by growth in entrepreneurship. In contrast, temporary interest rates directed to joint bank accounts increased investment in household public goods and spousal consensus over finances. The short-run effects of modest unconditional cash payments were similar to those of the interest rates, but the cash payments had no apparent long-run impact on economic outcomes.