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Household Welfare Effects of ROSCAs

Pushkar Maitra, Ray Miller () and Ashish Sedai ()
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Ray Miller: Department of Economics, Colorado State University
Ashish Sedai: Department of Economics, College of Business, University of Texas at Arlington

No 2022-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: We examine the effects of Rotating Savings and Credit Associations (ROSCAs) on house- hold welfare in India. The identification strategy is based on household fixed effects and instrumental variables (using the geographic leave-one-out instrument). We find that ROSCA membership increases household assets, consumption, energy efficiency and school expenditure, but only in rural areas. Welfare effects are stronger for poorer households and for those living in communities with stronger social ties. We argue that the persistence and success of ROSCAs depends on social ties, which are often stronger in rural communities.

Keywords: ROSCA; Household Welfare; Community Bonding (search for similar items in EconPapers)
JEL-codes: C26 C33 O12 (search for similar items in EconPapers)
Date: 2022-07
New Economics Papers: this item is included in nep-dev and nep-mfd
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