I use a field experiment in rural Kenya to study how temporary incentives to save impact long-run economic outcomes. Study participants randomly selected to receive large temporary interest rates on an individual bank account had significantly more income and assets 2.5–3.5 years after the interest rates expired. These changes are much larger than the short-run impacts on experimental bank account use and almost entirely driven by growth in entrepreneurship. In contrast, interest rates on joint accounts and modest cash payments did not significantly impact long-run economic outcomes.

Simone Schaner
Publication type: 
Published Paper
Journal: 
American Economic Journal: Applied Economics
Date: 
July 01, 2018
Country: