Data and code for: Pay Me Later: Savings Constraints and the Demand for Deferred Payments

Principal Investigator(s): View help for Principal Investigator(s) Lasse Brune, Northwestern University; Eric Chyn, Dartmouth College; Jason Kerwin, University of Minnesota

Version: View help for Version V1

Name	File Type	Size	Last Modified
Replication_Archive			06/15/2021 03:55:PM

Project Citation:

Brune, Lasse, Chyn, Eric, and Kerwin, Jason. Data and code for: Pay Me Later: Savings Constraints and the Demand for Deferred Payments. Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-06-23. https://doi.org/10.3886/E130367V1

Project Description

Summary: We study a simple savings scheme that allows workers to defer receipt of part of their wages for three months at zero interest. The scheme significantly increases savings during the deferral period, leading to higher post-disbursement spending on lumpy goods. Two years later, after two additional rounds of the savings scheme, we ﬁnd that treated workers have made permanent improvements to their homes. The popularity of the scheme implies a lack of good alternative savings options. The results of a follow-up experiment suggest that demand for the scheme is partly due to its ability to address self-control issues.

Funding Sources: Innovations for Poverty Action Financial Inclusion Program (FSI001); USDA National Institute of Food and Agriculture (Hatch project MIN14-164)

Scope of Project

Subject Terms: savings constraints; income timing; commitment savings; direct deposit; labor supply

JEL Classification:
      D14 Household Saving; Personal Finance
      J22 Time Allocation and Labor Supply
      J33 Compensation Packages; Payment Methods
      O12 Microeconomic Analyses of Economic Development
      O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration

Geographic Coverage: Malawi

Time Period(s): 10/2016 – 4/2019

Collection Date(s): 10/2016 – 4/2019

Universe: Full-time permanent employees at the Lujeri Tea Estates during the 2016-2017 main harvest season.

Data Type(s): administrative records data; survey data

Methodology

Response Rate:

Initial sample N = 870

Follow-up survey 1 (FS1) N = 841 (96.7% response rate)

Follow-up survey 2 (FS2) N = 810 (93.1% response rate)

Follow-up survey 3 (FS3) N = 788 (90.6% response rate)

Follow-up survey 4 (FS4) N = 723 (83.1% response rate)

Follow-up survey 5 (FS5) N = 662 (76.1% response rate)

Sampling: Our starting sample was all permanent full-time employees of the Lujeri tea estate (1,897 workers). We collected baseline data and social network data on the 1,240 workers who expressed initial interest in the scheme, then they made an incentivized participation decision at the end of the social network survey. Our final sample is the 870 workers who were still interested in the scheme at the end of the social network survey.

Data Source: Surveys of workers at the Lujeri tea estate, along with administrative records on their work performance and savings scheme participation.

Collection Mode(s): computer-assisted personal interview (CAPI); face-to-face interview

Unit(s) of Observation: Workers

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Published Versions

V1 [2021-06-23]

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