Why Don't the Poor Save More? Evidence from Health Savings Experiments

52 Pages Posted: 29 Jul 2011 Last revised: 5 Nov 2011

See all articles by Pascaline Dupas

Pascaline Dupas

Stanford University

Jonathan Robinson

University of California, Santa Cruz

Date Written: July 2011

Abstract

Using data from a field experiment in Kenya, we document that providing individuals with simple informal savings technologies can substantially increase investment in preventative health and reduce vulnerability to health shocks. Simply providing a safe place to keep money was sufficient to increase health savings, through a mental accounting effect. Adding an earmarking feature was only helpful when funds were put towards emergencies; earmarking for preventative health reduced savings on average, because the liquidity cost of tying up money was too great. Providing social pressure and credit through a ROSCA-based savings scheme had very large effects.

Suggested Citation

Dupas, Pascaline and Robinson, Jonathan, Why Don't the Poor Save More? Evidence from Health Savings Experiments (July 2011). NBER Working Paper No. w17255. Available at SSRN: https://ssrn.com/abstract=1898511

Pascaline Dupas

Stanford University ( email )

Stanford, CA 94305
United States

Jonathan Robinson

University of California, Santa Cruz ( email )

1156 High St
Santa Cruz, CA 95064
United States

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