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

Michael Callen, Suresh de Mel, Craig McIntosh and Christopher Woodruff ()
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Suresh de Mel: University of Peradeniya
Craig McIntosh: University of California,

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: When households increase their deposits in formal bank savings accounts, what is the source of the money? We combine high-frequency surveys 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 are in sacrificed leisure time: households work more, with evidence that improved savings options generate an increase in labor effort in both selfemployment and the wage market. The results are consistent with a standard neo-classical model of the effect of real interest rate changes on intertemporal labor allocation, and suggest that the labor allocation channel is an important mechanism linking savings opportunities to income.

Keywords: savings; household decisionmaking; high-frequency surveys. JEL Classification: O16; D14; G21 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-exp and nep-mfd
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http://www2.warwick.ac.uk/fac/soc/economics/resear ... 79-2016_woodruff.pdf

Related works:
Journal Article: What Are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2019) Downloads
Working Paper: What Are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2015) Downloads
Working Paper: What are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2014) Downloads
Working Paper: What are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2014) Downloads
Working Paper: What are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka (2014) Downloads
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