The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the Poor

Simone Schaner

NBER Working Paper No. 22534
Issued in August 2016
NBER Program(s):Development Economics

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. Temporary interest rates directed to joint bank accounts had no detectable long-run impacts on entrepreneurship or income, but increased investment in household public goods and spousal consensus over finances.

Supplementary materials for this paper:

• randomized controlled trials registry entry

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22534

Published: Simone Schaner, 2018. "The Persistent Power of Behavioral Change: Long-Run Impacts of Temporary Savings Subsidies for the Poor," American Economic Journal: Applied Economics, vol 10(3), pages 67-100. citation courtesy of