Dean Karlan and Leigh L. Linden, “Loose Knots: Strong versus Weak Commitments to Save for Education in Uganda [pdf].” NBER Working Paper No. 19863, January 2014.
• Low threshold commitment devices (loose knots) might attract more participants, but not lead to as much behavior change as would stronger commitments.
• A field experiment involved 136 rural or near-rural primary schools in Uganda. Some schools were given a “strong” commitment savings product – withdrawals took the form of vouchers that could be used only to purchase school supplies; other schools received a weaker (loose knots) version, where withdrawals could be made in cash and spent on anything.
• Students deposited more money in the soft commitment account than in the hard commitment account, which led to more school supplies purchased and better test scores.
• The savings account employed a double-locked lock box kept at the school, with the funds transferred to a bank at the end of a trimester. The accounts earned no interest, despite significant inflation. The savings decisions were taken in public.
• When disbursements were made from the accounts, a small market was set up at each school to sell school supplies, tutoring, etc. With vouchers, this market provided the only legitimate use for the savings (other than re-deposit.)
• Parent outreach does not affect savings, but it helps direct saved funds towards education. The loose knot (cash) accounts with parent outreach formed the preferred treatment in terms of incentivizing the purchase of more school supplies.
• This commitment savings intervention was very costly to implement relative to the increased savings.
No comments:
Post a Comment