Nudging Youth to Develop Savings Habits: Experimental Evidence Using SMS Messages
54 Pages Posted: 26 Aug 2015
Date Written: August 2015
We report results from a field experiment that articulates financial information delivery through cellphone text messages and financial decisions among low-income youth in Colombia. Youth accountholders are randomly assigned to one of four experimental conditions: i) twelve monthly financial education messages, ii) twelve monthly savings reminders, iii) twenty-four semimonthly reminders and iv) control. After twelve months, account balances of youth assigned to receive monthly and semimonthly reminders increase by 28 and 43 percent, respectively, relative to controls. Financial education messages do not increase account balances. At least two thirds of account balance increases in reminder groups are net savings increases. Savings effects of reminders last even eight months after youth stop receiving messages, the latest we can observe.
Keywords: Financial Education, Reminders, SMS, Youth, Savings, Field Experiments
JEL Classification: D14, E21, I29, O16
Suggested Citation: Suggested Citation