Description:

Sean Higgins  (Northwestern University): "Increasing Financial Inclusion and Attracting Deposits through Prize-Linked Savings"

Abstract: Despite the benefits of saving in formal financial institutions, take-up and use of savings accounts are low among the poor. In a randomized experiment across 110 bank branches throughout Mexico, we provide a temporary incentive to both open and use a savings account: saving earns raffle tickets for cash prizes. We find that 41% more accounts are opened in treatment branches than control branches during the incentive months, and the temporary two-month incentive has a lasting three-year impact on the number of deposits made at treatment branches. Prize-linked savings can thus benefit both poor households and banks.

*All fall lunches will take place via zoom