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Type | Working Paper |
Scope | Discipline-based scholarship |
Title | Saving more to borrow less: experimentalevidence from access to formal savings accounts in Chile |
Organization Unit | |
Authors |
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Language |
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Institution | National Bureau of Economic Research |
Series Name | NBER working paper series |
Number | 20239 |
Number of Pages | 50 |
Date | 2014 |
Abstract Text | Poverty is often characterized not only by low and unstable income, but also by heavy debt burdens. We find that reducing barriers to saving through access to free savings accounts decreases participants' short-term debt by about 20%. In addition, participants who experience an economic shock have less need to reduce consumption, and subjective well-being improves significantly. Precautionary savings and credit therefore act as substitutes in providing self-insurance, and participants prefer borrowing less when a free formal savings account is available. Take-up patterns suggest that requests by others for participants to share their resources may be a key obstacle to saving. |
Free access at | Official URL |
Official URL | http://www.nber.org/papers/w20239 |
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PDF File | Download from ZORA |
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Additional Information | Auch erschienen als Harvard Business School Working Paper No. 14-001: http://www.hbs.edu/faculty/Pages/item.aspx?num=45072 |