What Are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka

Michael Callen, Suresh de Mel, Craig McIntosh and Christopher Woodruff

The Review of Economic Studies, 2019, vol. 86, issue 6, 2491-2529

Abstract: The world’s poor are seeing a rapid expansion in access to formal savings accounts. What is the source of savings when households are connected to a formal account? We combine a high-frequency panel survey spanning two and a half years with an experiment in which a Sri Lankan bank used mobile Point-of-Service (POS) terminals to collect deposits directly from households each week. We find that the headwaters of formal savings lie in sacrificed leisure time: households work more, and improved savings options generate an increase in labour effort in both self-employment and in the wage market. The results suggest that the labour allocation channel is an important mechanism linking savings opportunities to income.

Keywords: Savings; Intertemporal labour supply; Household decision-making; High-frequency surveys (search for similar items in EconPapers)
JEL-codes: D14 G21 O16 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (20)

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Related works:
Working Paper: What are the headwaters of formal savings? Experimental evidence from Sri Lanka (2019)
Working Paper: What Are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2016)
Working Paper: What Are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2015)
Working Paper: What are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2014)
Working Paper: What are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2014)
Working Paper: What are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:86:y:2019:i:6:p:2491-2529.

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