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

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  • Karlan, Dean S.
  • 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.

Suggested Citation

  • Karlan, Dean S. & Linden, Leigh, 2014. "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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    References listed on IDEAS

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    1. Francesco Avvisati & Marc Gurgand & Nina Guyon & Eric Maurin, 2014. "Getting Parents Involved: A Field Experiment in Deprived Schools," Review of Economic Studies, Oxford University Press, vol. 81(1), pages 57-83.
    2. Hidalgo, Diana & Onofa, Mercedes & Oosterbeek, Hessel & Ponce, Juan, 2013. "Can provision of free school uniforms harm attendance? Evidence from Ecuador," Journal of Development Economics, Elsevier, vol. 103(C), pages 43-51.
    3. Dean Karlan & Aishwarya Lakshmi Ratan & Jonathan Zinman, 2014. "Savings by and for the Poor: A Research Review and Agenda," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 36-78, March.
    4. Felipe Barrera-Osorio & Marianne Bertrand & Leigh L. Linden & Francisco Perez-Calle, 2011. "Improving the Design of Conditional Transfer Programs: Evidence from a Randomized Education Experiment in Colombia," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 167-195, April.
    5. Nava Ashraf & Dean Karlan & Wesley Yin, 2006. "Tying Odysseus to the Mast: Evidence From a Commitment Savings Product in the Philippines," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 635-672.
    6. Carla Bertoncino & Paud Murphy & Lianqin Wang, 2002. "Achieving Universal Primary Education in Uganda : The ‘Big Bang’ Approach," World Bank Publications - Reports 10412, The World Bank Group.
    7. Dean Karlan, Aishwarya Lakshmi Ratan, Jonathan Zinman, 2013. "Savings by and for the Poor: A Research Review and Agenda-Working Paper 346," Working Papers 346, Center for Global Development.
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    More about this item

    Keywords

    Commitment Savings; Educational Resources; Micro-Savings; 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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