Progress 10/01/16 to 09/30/21
Outputs
Target Audience:We have two target audiences for this work: policymakers who are designing interventions to help people in rural Africa, and social scientists two are interested in improving livelihoods financial inclusion among the rural poor. We have had very substantial success reaching both audiences this year. For the first audience, our work was featured on VoxDev, a website for disemminating research about development policy. Innovations for Poverty Action is also hosting a seminar about our results and potential applications to cash transfers, workfare programs, and payroll systems for companies. Both of these policymakers focused on improving livelihoods learn about our approach, as a possible way to raise the savings rates for their beneficiaries. We are also working on the design of a project with GiveDirectly to scale up our intervention with their cash recipients, and exploring the possibility of doing something similar with the Government of Indonesia. In terms of reaching the second audience, our paper has been published at the American Economic Review, the premier journal in the field of economics. The final version - which acknowledges NIFA's support - was published online and in print in July. Changes/Problems:As noted in previous progress reports, we were unable to study the impacts of the second savings option, mobile money (MM). What opportunities for training and professional development has the project provided?We are working with a graduate student on follow-on work that uses the data from this project. It focuses on using the data on worker's daily output to measure agricultural labor supply elasticities via bunching estimators, and is the subject of my new MAES project that started this year. How have the results been disseminated to communities of interest?As noted above, our work was featured on VoxDev and is also the subject of an online seminar run by Innovations for Poverty Action. Both of these channels target policymakers who are interested in improving the livelihoods of people in developing countries, especially those in rural areas. What do you plan to do during the next reporting period to accomplish the goals?
Nothing Reported
Impacts
What was accomplished under these goals?
We achieved all the major goals set out for the project, with one exception: we were unable to implement the planned MM arm due to logistical constraints at the partner firm. We completed the planned fieldwork, collecting data on nearly 900 workers who were interested in the savings product and tracking them for over three years. Half of them were enrolled in the savings scheme. The savings scheme was very popular and led to a substantial increase in short-term savings, which ended up leading to the accumulation of additional assets and workers making improvements to their homes. We presented the results from the study twenty times, including at leading conferences such as the AEA meetings in 2019 and the NEUDC meetings in 2017. We also presented our work at institutions that include Yale, the Philadephia Federal Reserve, and the University of Washington. In 2021 our paper was accepted by the American Economic Review, the leading economics journal in the world. It was published in the July issue of the journal. We also circulated the paper as an NBER working paper. The paper has already been cited ten times. We have also worked to publicize our findings in other ways. Our results were featured on VoxDev and shared by the World Bank's Development Impact blog. Innovations for Poverty Action is hosting a panel this December to discuss our findings and how they might be useful in other settings. To achieve the long-run goals of improving policy based on our findings, we are in talks with GiveDirectly and Inclusive Financial Innovation Initiative about ways to incorporate the "Pay Me Later" approach into other payment systems.
Publications
- Type:
Journal Articles
Status:
Published
Year Published:
2021
Citation:
Brune, L., Chyn, E., & Kerwin, J. (2021). Pay Me Later: Savings Constraints and the Demand for Deferred Payments. American Economic Review, 111(7), 21792212. https://doi.org/10.1257/aer.20191657
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Progress 10/01/19 to 09/30/20
Outputs
Target Audience:We have two target audiences for this work: policymakers who are designing interventions to help people in rural Africa, and social scientists two are interested in improving livelihoods financial inclusion among the rural poor. We have had very substantial success reaching both audiences this year. For the first audience, our work has been included in a publication by the Abdul Latif Jameel Poverty Action Lab (J-PAL) about commitment savings products for people in developing countries. This will help people involved in designing workfare or cash transfer programs in rural areas learn about our approach, as a possible way to improve the savings rates and well-being of their beneficiaries. In terms of reaching the second audience, we submitted our paper for publication last year, and now it is revise-and-resubmit at the American Economic Review, the premier journal in the field of economics. We recently submitted a revised version of the paper to the journal; if accepted, this would pay major dividends in terms of the paper's impact. Changes/Problems:As noted in previous progress reports, we were unable to study the impacts of the second savings option, mobile money (MM). What opportunities for training and professional development has the project provided?I have not yet involved graduate students on this project, but we have ideas for follow-on work to improve the measurement of assets in rural communities in the developing world, that would exploit the same data collected for this project. I think that a follow-on study would be a good opportunity for involving a graduate student, who could gain hands-on experience doing research. How have the results been disseminated to communities of interest?In previous years, we have presented this work at academic conferences. It has also been picked up by prominent development economics newsletters and blogs, such as the World Bank's Development Impact blog and the J-PAL newsletter. This year, our results are being featured in a publication on commitment savings products being put out by J-PAL. What do you plan to do during the next reporting period to accomplish the goals?Our plans for next year are focused on completing the publication process for the first paper. This will likely involve another round of revision at the American Economic Review; if the paper is not accepted there, we will send it to other journals, starting with the American Economic Journal: Applied Economics. Another goal for next year is to begin the aforementioned follow-up study on improving asset measurements. Rural households hold the majority of their wealth in assets and livestock, and measurements of this wealth are key outcomes in many studies of efforts to improve livelihoods, such as the famed "graduation" programs (Banerjee et al. 2015, Science). Asset measurements are also used as proxies for consumption, food security, and economic growth. Our dataset contains unique data where self-reported assets (collected away from the home) are matched with in-person validations by our survey enumerators. This provides us with the opportunity to assess the quality of various methods of measuring physical assets and livestocks in rural Africa, and investigating their implications for previous evidence on anti-poverty programs.
Impacts
What was accomplished under these goals?
Last year we completed the data collection for the project and wrote up the paper. This year, it received a revise-and-resubmit from the American Economic Review, the leading economics journal in the world. We received the decision on July 12th, and significantly overhauled the paper based on the comments from the editor and the two referees. The paper is greatly improved as a result. We turned in the revision on December 8th.
Publications
- Type:
Other
Status:
Under Review
Year Published:
2020
Citation:
Brune, Lasse, Eric Chyn, and Jason Kerwin. "Pay Me Later:Savings Constraints and the Demand for Deferred Payments." Working Paper
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Progress 10/01/18 to 09/30/19
Outputs
Target Audience:We have been very successful at reaching our target audience of policymakers and social scientists who are interested in promoting livelihoods and financial inclusion among the poor. This year we presented the project at three major academic conferences: the American Economic Association conference in January, the Centre for the Study of African Economies conference in March, and the Northeast Universities Development Consortium conference in October. I also presented the results in an academic seminar at the University of Washington in Seattle. Beyond those presentations, the results have also been disseminated in fora that are more targeted toward policymakers. They were picked up by the World Bank's Development Impact blog in October and also included in the december edition of J-PAL's newsletter, which has 30,000 subscribers. Changes/Problems:As noted in previous progress reports, we were unable to study the impacts of the second savings option, mobile money (MM). What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?As summarized above, we have disseminated the results to policymakers and researchers in several forms. We also previously presented these results to the firm where we conducted the experiment. What do you plan to do during the next reporting period to accomplish the goals?Next year we plan to continue the publication process for the paper. This will depend on how things go at initial journals; if rejected at the American Economic Review, we would next try the American Economic Journal: Applied Economics, then the Review of Economic Studies, and then the Journal of Development Economics. I will also work to continue to disseminate our findings. I plan to promote them on my own personal blog as well as Twitter, and to submit them to several other public-facing blogs such as VoxDev. A key goal is to get these ideas out to people in control of payment systems, such as employers, but also governments who run social support and cash transfer programs. Finally, I aim to work toward finding other firms who would be interested in trying out thistechnology. Our previous attempt to partner with Beyonic, a payroll company, did not pan out because we targeted the wrong grant. I would like to try again with them and also look for potential partners in the US or other developed countries.
Impacts
What was accomplished under these goals?
This year we completed data collection for this project and found a set of very exciting long-term results. Repeated exposure to the intervention leads to permanent increases in asset holdings, in the form of improved roofing materials (metal roofs) on houses. This is a major savings goal for the workers in our sample and carries multiple benefits - metal roofs last longer than grass roofs and have much lower maintenance costs. They keep people warmer and drier during the rainy season. This result also serves as a proof of concept: deferred wage payments can help people not just save in the short run but grow wealthier in the long run. An important open question is whether we can replicate this finding in other populations. Based on these results, we have finished a heavily-revised draft of the paper which we have begun submitting to academic journals. The paper has been under review at the American Economic Review since October. (Note that, as described in a previous progress report, we are now only studying the deferred wages savings product; the mobile money accounts were not a viable option for our partner firm.)
Publications
- Type:
Conference Papers and Presentations
Status:
Other
Year Published:
2019
Citation:
Pay Me Later: Savings Constraints and the Demand for Deferred Payments (with Lasse Brune and Eric Chyn). Presented at:
- American Economic Association 2019 Annual Meeting. Atlanta, GA.
- Centre for the Study of African Economies 2019 Conference. Oxford, UK.
- North East Universities Development Consortium Conference. Evanston, IL.
- University of Washington Department of Economics. Seattle, WA.
- Type:
Other
Status:
Other
Year Published:
2019
Citation:
Work featured in the following blogs and newsletters:
- Development Impact Blog (October 2019)
- J-PAL Newsletter (December 2019)
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Progress 10/01/17 to 09/30/18
Outputs
Target Audience:The target audience reached during the current reporting period has included social scientists who are studying livelihoods in rural Africa and other parts of the developing world, as well as those who study financial inclusion in the US and other developed countries. In the past year we have presented the work at one conference and in seven invited research seminars. I gave seven of those nine presentations myself. The audiences have included development economists, African studies experts, researchers studying the Chinese economy, and business school professors. At a previous conference (the Financial Inclusion Program conference), we were connected with Beyonic, a payment services organization that manages payroll for hundreds of firms and over 100,000 employees in the developing world, and are in talks with Beyonic to roll out the deferred wages savings plan to their clients. The interest in our research from this wide range of audiences suggests that our savings product could be a low-cost way to improve livelihoods for agricultural workers and other low-wage employees around the world. Changes/Problems:As described in our previous progress report, there were logistical barriers to rolling out the alternate savings product (MM). We completed a small pilot study in which we tested the feasibility of using the product, but the transaction fees were too high to permit a broader rollout and so a randomized evaluation was not possible. Moreover, the capacity of the mobile money company to actually manage the payroll process was tenuous at best. Fortunately, MM was the less-important of the two products we wanted to study, as it has already been studied in other contexts. We have conducted no additional testing of MM in the current reporting period. What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?As noted above we have presented our results at a wide range of academic conferences and invited seminars. We have also shown our findings to the management of the firm. What do you plan to do during the next reporting period to accomplish the goals?Our plan is to revise our paper to include the results of our supplementary experiments and also the second wave of the randomized trial, and then submit the revised paper to academic journals.
Impacts
What was accomplished under these goals?
We previously completed an initial randomized trial of DW (which we are now calling "Pay Me Later" as described above), which included several waves of data collection. We measured the uptake and utilization of the product and its impact on expenditures, lumpy investments, and labor supply. During the current reporting period, we ran a set of supplementary experiments in which we varied different components of the savings product to test which factors are the main drivers of demand for the product. We also conducted a second wave of the randomized trial, in which we re-treated the original treatment group two additional times. We will begin collecting outcome data for this second wave in December 2018; this will let us measure the longer-term impacts of the product. Based on the data we have collected so far, we have completed a draft paper, which we have presented at numerous academic conferences and invited seminars during the current reporting period.
Publications
- Type:
Conference Papers and Presentations
Status:
Other
Year Published:
2018
Citation:
- Hong Kong University. Hong Kong, China.
- Hong Kong University of Science and Technology. Hong Kong, China.
- Peking University. Beijing, China.
- China Agricultural University. Beijing, China.
- Midwest International Economic Development Conference. Minneapolis, MN.
- Federal Reserve Bank of Philadephia. Philadelphia, PA.
- University of Minnesota African Studies Initiative. Minneapolis, MN.
- University of Utah. Salt Lake City, UT.
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Progress 10/01/16 to 09/30/17
Outputs
Target Audience:The target audience reached by this research so far has been both policymakers and social scientists who are studying livelihoods in rural Africa and other parts of the developing world. We have presented the work at several conferences already. At one of those conferences (the Financial Inclusion Program conference), our work was seen by Beyonic, a payment services organization that manages payroll for hundreds of firms and over 100,000 employees in the developing world, and they are very interested in the savings product we developed. We are in talks with Beyonic to roll out the deferred wages savings plan to their clients. If successful, this could become a standard feature of payroll systems in low-income, financially-excluded locales. Our hope is that the Beyonic rollout will help us reach fair trade activists as well, since our savings product could be a low-cost way to improve livelihoods in the developing world, especially for agricultural workers. Changes/Problems:As noted above, we were unable to study the impacts of the second savings option, mobile money (MM). What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?Yes, we have presented preliminary results at four conferences so far and also shown them to the management of the firm. As noted above, a payroll-processing company, Beyonic, is planning to roll out Pay Me Later to their clients, including 100+ firms and 100,000+ workers. We are in talks with them about evaluating that rollout. What do you plan to do during the next reporting period to accomplish the goals?We plan to finish our research paper and submit it to academic journals, and also to partner with Beyonic to study the potential of Pay Me Later in other settings.
Impacts
What was accomplished under these goals?
We successfully completed a randomized trial of DW (which we are now calling "Pay Me Later" as described above), and several waves of data collection. We have measured uptake and utilization of the product and its impact on expenditures, lumpy investments, and labor supply. We have completed a draft of a paper on our results which we are presenting at academic conferences. There were logistical barriers to rolling out the alternate savings product (MM). We completed a small pilot study in which we tested the feasibility of using the product, but the transaction fees were too high to permit a broader rollout and so a randomized evaluation was not possible. Moreover, the capacity of the mobile money company to actually manage the payroll process was tenuous at best. Fortunately, MM was the less-important of the two products we wanted to study, as it has already been studied in other contexts.
Publications
- Type:
Conference Papers and Presentations
Status:
Other
Year Published:
2017
Citation:
Pay Me Later: A Simple Employer-based Saving Scheme (with Lasse Brune and Eric Chyn). Presented at:
- North East Universities Development Consortium Conference. Medford, MA.
- Innovations for Poverty Action, Researcher Gathering on Financial Inclusion. New Haven, CT.
- Consumer Financial Protection Bureau. Washington, DC.
- Yale University Department of Economics. New Haven, CT.
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