| Abstract: |
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 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. Temporary interest rates directed to joint bank accounts had
no detectable long-run impacts on entrepreneurship or income, but increased
investment in household public goods and spousal consensus over finances. |