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The persistent effects of youth savings reminders: Experimental evidence from text-message campaigns in Colombia

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  • Rodríguez, Catherine
  • Saavedra, Juan E.

Abstract

We report on a nationwide field experiment with a commercial bank in Colombia in which low-income youth (12 years old on average) who open new accounts are randomly assigned immediately after opening the account to control or to receive one of three twelve-month text-messaging campaigns: i) monthly savings reminders, ii) semimonthly reminders, iii) monthly action-oriented financial education messages. Relative to control, monthly and semimonthly reminders groups increase account balances during the campaign as a result of reduced withdrawals, potentially through savings shifts from home to bank accounts. After the campaign youth in both reminders groups continue to use the accounts but do not deplete balances. The financial education campaign had a smaller, not statistically significant, effect on account balances, but some short-term effect on reducing withdrawals, possibly through shifts from home savings.

Suggested Citation

  • Rodríguez, Catherine & Saavedra, Juan E., 2019. "The persistent effects of youth savings reminders: Experimental evidence from text-message campaigns in Colombia," Journal of Development Economics, Elsevier, vol. 139(C), pages 135-156.
    • Handle: RePEc:eee:deveco:v:139:y:2019:i:c:p:135-156
    DOI: 10.1016/j.jdeveco.2019.03.001
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    References listed on IDEAS

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    Cited by:

    1. Andrieş, Alin Marius & Walker, Sarah, 2023. "When the message hurts: The unintended impacts of nudges on saving," Journal of Comparative Economics, Elsevier, vol. 51(2), pages 439-456.
    2. Dur, Robert & Fleming, Dimitry & van Garderen, Marten & van Lent, Max, 2021. "A social norm nudge to save more: A field experiment at a retail bank," Journal of Public Economics, Elsevier, vol. 200(C).
    3. Giridhari Mohanta, 2024. "Small Savings Scheme of the Post Office and Savings Habit of People: The Role of Financial Consultant," Business Perspectives and Research, , vol. 12(1), pages 65-82, January.
    4. Paul Christian & Steven Glover & Florence Kondylis & Valerie Mueller & Matteo Ruzzante & Astrid Zwager, 2022. "Do private consultants promote savings and investments in rural Mozambique?," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 22-36, January.
    5. Azevedo, Viviane & Lafortune, Jeanne & Olarte, Liliana & Tessada, José, 2024. "Personalizing or reminding? How to better incentivize savings among underbanked individuals," Journal of Economic Behavior & Organization, Elsevier, vol. 222(C), pages 25-63.

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    More about this item

    Keywords

    Financial education; Reminders; Text-messages; Youth; Savings; Field experiments; Colombia;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • I29 - Health, Education, and Welfare - - Education - - - Other

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