Better Strategies for Saving More Evidence from Three Interventions in Chile

Abhijit Banerjee, Claudia Martínez A. and Esteban Puentes

Working Papers from University of Chile, Department of Economics

Abstract: Individual behavioral biases can affect savings behavior. We conduct an experiment to evaluate different strategies to increase savings. We compare an automatic savings plan (or default rule), monthly reminders, and a rule-of-thumb savings package that appeals to careful spending. We find that rule-of-thumb and default rules can increase savings for one year after the intervention. In contrast, reminders can reduce account balances and debt levels. The increase in savings under the default rule is produced by a (mechanical) increase in deposits, but savings is later decreased by an increase in withdrawals.

Pages: 87 pages
Date: 2023-04
New Economics Papers: this item is included in nep-des, nep-exp, nep-lam and nep-mfd
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