Savings Defaults and Payment Delays for Cash Transfers : Field Experimental Evidence from Malawi

Financial products and transfer schemes are often designed to help individuals improve welfare by following through on intertemporal plans. This paper implements an artefactual field experiment in Malawi to test the ability of households to manage...

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Main Authors:	Brune, Lasse, Gine, Xavier, Goldberg, Jessica, Yang, Dean
Format:	Working Paper
Language:	English en_US
Published:	Washington, DC 2016
Subjects:	financial literacy banking financial capability household expenditure budget management
Online Access:	http://documents.worldbank.org/curated/en/2016/08/26741210/savings-defaults-payment-delays-cash-transfers-field-experimental-evidence-malawi http://hdl.handle.net/10986/25052

id	okr-10986-25052
recordtype	oai_dc
spelling	okr-10986-250522021-04-23T14:04:28Z Savings Defaults and Payment Delays for Cash Transfers : Field Experimental Evidence from Malawi Brune, Lasse Gine, Xavier Goldberg, Jessica Yang, Dean financial literacy banking financial capability household expenditure budget management Financial products and transfer schemes are often designed to help individuals improve welfare by following through on intertemporal plans. This paper implements an artefactual field experiment in Malawi to test the ability of households to manage a cash windfall. This study varies whether 474 households receive a payment in cash or through direct deposit into pre-established accounts at a local bank. Payments are made immediately, with one day delay, or with eight days delay. Defaulting the payments into savings accounts leads to higher bank account balances, an effect that persists for several weeks. However, neither savings defaults nor payment delays affect the amount or composition of spending, suggesting that households manage cash effectively without the use of formal financial products. 2016-09-12T22:31:45Z 2016-09-12T22:31:45Z 2016-08 Working Paper http://documents.worldbank.org/curated/en/2016/08/26741210/savings-defaults-payment-delays-cash-transfers-field-experimental-evidence-malawi http://hdl.handle.net/10986/25052 English en_US Policy Research Working Paper;No. 7807 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Malawi
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	financial literacy banking financial capability household expenditure budget management
spellingShingle	financial literacy banking financial capability household expenditure budget management Brune, Lasse Gine, Xavier Goldberg, Jessica Yang, Dean Savings Defaults and Payment Delays for Cash Transfers : Field Experimental Evidence from Malawi
geographic_facet	Africa Malawi
relation	Policy Research Working Paper;No. 7807
description	Financial products and transfer schemes are often designed to help individuals improve welfare by following through on intertemporal plans. This paper implements an artefactual field experiment in Malawi to test the ability of households to manage a cash windfall. This study varies whether 474 households receive a payment in cash or through direct deposit into pre-established accounts at a local bank. Payments are made immediately, with one day delay, or with eight days delay. Defaulting the payments into savings accounts leads to higher bank account balances, an effect that persists for several weeks. However, neither savings defaults nor payment delays affect the amount or composition of spending, suggesting that households manage cash effectively without the use of formal financial products.
format	Working Paper
author	Brune, Lasse Gine, Xavier Goldberg, Jessica Yang, Dean
author_facet	Brune, Lasse Gine, Xavier Goldberg, Jessica Yang, Dean
author_sort	Brune, Lasse
title	Savings Defaults and Payment Delays for Cash Transfers : Field Experimental Evidence from Malawi
title_short	Savings Defaults and Payment Delays for Cash Transfers : Field Experimental Evidence from Malawi
title_full	Savings Defaults and Payment Delays for Cash Transfers : Field Experimental Evidence from Malawi
title_fullStr	Savings Defaults and Payment Delays for Cash Transfers : Field Experimental Evidence from Malawi
title_full_unstemmed	Savings Defaults and Payment Delays for Cash Transfers : Field Experimental Evidence from Malawi
title_sort	savings defaults and payment delays for cash transfers : field experimental evidence from malawi
publisher	Washington, DC
publishDate	2016
url	http://documents.worldbank.org/curated/en/2016/08/26741210/savings-defaults-payment-delays-cash-transfers-field-experimental-evidence-malawi http://hdl.handle.net/10986/25052
_version_	1764458243655991296

Savings Defaults and Payment Delays for Cash Transfers : Field Experimental Evidence from Malawi

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