Scholars going back to Adam Smith and Max Weber have hypothesized that religiosity promotes economic success. In the Philippines, researchers conducted a randomized evaluation to measure the impact of an evangelical Protestant religious values and theology education program on individuals’ economic and subjective wellbeing. Results show that the program increased religiosity and incomes, but decreased self-perception of relative economic wellbeing.
Although the success of microcredit was originally attributed to the group loan model, there is little evidence on the relative impacts of individual lending versus group lending on household consumption, income, and enterprise creation. In this study, researchers randomly selected existing group-lending centers to convert to an individual liability model.
Around the world, 168 million children are engaged in child labor, and in the Philippines many of the children working illegally are in occupations that pose a threat to their health and safety. However, poor families may have little other choice to support themselves. The government of the Philippines aims to help families avoid child labor by providing them with a one-time asset transfers equivalent to US $500 and training in using the asset to develop a livelihood.
Access to savings accounts may help the poor through debt reduction, increased income through productive investments, and the ability to maintain spending during difficult times. However, there is little evidence on why people choose to open an account and whether interest rates or other account features are effective tools for expanding use.
International remittances are an important financial tool for many developing countries, and many organizations offer financial products or financial education services to help families manage the remittances they receive. Innovations for Poverty Action worked with researchers to provide families with financial products and financial education in the Philippines to test whether the two services influenced each other.
In 2012, remittances from migrant workers to developing countries were roughly three times the total amount of global foreign aid, yet little is known about how to make these funds work better.1 2 Researchers in this study explored this in two ways: First, they introduced a financial product that enabled migrant workers to pay schools in the Philippines
Small businesses are often believed to serve as engines for innovation, employment and social mobility, due to their flexibility in responding to new opportunities and their potential for rapid growth. In developing countries, SMEs make up a particularly large part of the economy, yet data suggests that very few small enterprises in developing countries grow into larger businesses.
Vote-buying and vote-selling obstruct the democratic process, yet they remain pervasive in many developing democracies. Researchers asked voters in the Philippines to make a simple, unenforceable promise not to accept money from politicians or to promise to vote according to their conscience, even if they do accept money, to test the impact of promises on voters’ behavior. A majority of respondents made promises not to sell their votes.
Understanding why some micro entrepreneurs frequently use high interest rate debt for working capital without a corresponding increase in the scale of business operations.
Intuition suggests that certain personality types are predisposed to loan default. Accurately identifying these personality types could have profound implications for consumer banking policy, and also important lessons for our understanding of why credit markets may fail. In partnership with the Rural Bank of Mabitac in the Philippines, researchers implemented two experiments and a survey to predict if prospective clients with various personality traits would pay back their loans.
This is one of a handful of new studies which provide a rigorous estimate of the impact of microfinance. Accepted applicants used credit to change the structures of their business investments, resulting in smaller, lower-cost, more profitable businesses. So while business investments did not actually increase, profitability did increase because the capital allowed businesses to be reorganized. This happened most often by shedding unproductive employees.
Poor microentrepreneurs have surprised skeptics with their ability to repay loans, but microfinance institutions and commercial banks lending to the poor still struggle with relatively high transaction costs and low rates of return. In “the text message capital of the world,” the Philippines, researchers tested the effect of text message reminders on client repayment rates. In contrast with previous research, they found that text message reminders did not increase repayment on average.
Can financial incentives work to help people quit smoking? The CARES (Committed Action to Reduce and End Smoking) Program, creates a commitment contract that provides financial incentives for smokers who wish to quit smoking. Smokers offered the product were more likely to be smoke-free 6 and 12 months afterwards.
Some research suggests that individuals with higher levels of altruism are more attracted to public sector work, and recent studies indicate that public service motivation can serve as an indicator for strong job performance. Researchers conducted a randomized evaluation to test the impact of an all-expense-paid three-day leadership training workshop on incentivizing honest and competent youth to run for a village youth council.