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Loose Knots:Strong versus Weak Commitments to Save for Education in Uganda

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  • Karlan, Dean
  • Linden, Leigh

Abstract

Commitment devices offer an opportunity to restrict future choices. However, if severe restrictions deter participation, weaker restrictions may be a more effective means of changing behavior. We test this using a school-based commitment savings device for educational expenses in Uganda. We compare an account fully-committed to educational expenses to an account in which savings are available for cash withdrawal but intended for educational expenses. The weaker commitment generates increased savings in the program accounts and when combined with a parent outreach program, higher expenditures on educational supplies. It also increases scores on an exam covering language and math skills by 0.14 standard deviations. We find no effect for the fully-committed account, and we find no effect for either account on attendance, enrollment, or non-cognitive skills.

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  • Karlan, Dean & Linden, Leigh, 2016. "Loose Knots:Strong versus Weak Commitments to Save for Education in Uganda," CEPR Discussion Papers 9832, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:9832
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    1. repec:hal:pseose:halshs-00942662 is not listed on IDEAS
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    More about this item

    Keywords

    Commitment savings; Micro-savings; Educational resources; School participation;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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