The Impact of Subsidy Delivery Method on Savings Behavior: Experimental Evidence
Date issued
Nov 2023
Subject
Subsidy;
Financial Accountancy;
Saving Account;
Conditional Cash Transfer;
Mobile Banking;
Project Profile;
Saving Plan;
Saving;
Trust
JEL code
G20 - Financial Institutions and Services: General;
D14 - Household Saving; Personal Finance;
E21 - Consumption • Saving • Wealth
Country
Chile
IDB series
Impact Evaluations
Category
Working Papers
We examine the impact of offering conditional cash transfer (CCT) beneficiaries the choice to receive cash transfers in bank accounts instead of cash. We investigate the effects on savings behavior and downstream outcomes such as assets and trust. We find, on average, no significant impact on overall savings or downstream outcomes. However, among individuals with nonpositive balances prior to the offering, we observe an increase in balances in savings accounts and in the transactional accounts in which the subsidies were initially deposited. These findings underscore the potential of using bank accounts to encourage savings, particularly for individuals with limited prior savings.
Generative AI enabled