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

  • Dean Karlan

    ()

    (Economic Growth Center, Yale University)

  • Leigh Linden

    ()

    (University of Texas at Austin)

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    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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    File URL: http://www.econ.yale.edu/growth_pdf/cdp1037.pdf
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    Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 1037.

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    Length: 33 pages
    Date of creation: Jan 2014
    Date of revision:
    Handle: RePEc:egc:wpaper:1037
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    Web page: http://www.econ.yale.edu/

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    1. 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, MIT Press, vol. 121(2), pages 635-672, May.
    2. 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.
    3. 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 167-95, April.
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