Development Economics Seminar: Chris Woodruff (University of Oxford)
|2 May 2017
|13:00 - 14:00
|What is it:
|School of Social Sciences
Title: What Are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka.
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 self-employment 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.
Organisation: University of Oxford
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