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Loose knots: Strong versus weak commitments to save for education in Uganda
1Kellogg School of Management at Northwestern University, Global Poverty Research Lab, NBER, CEPR, United States.
Abstract:
Commitment devices offer an opportunity to restrict future choices. However, strict commitments may deter participation. Using a school-based commitment savings program for children to save for educational expenses in Uganda, we compare an account fully committed to school expenses to an account with a weaker commitment (funds withdrawn in cash, rather than a voucher). Children save more in the weaker commitment treatment arm, and when combined with parental outreach spend more on educational supplies and score 0.10 standard deviations (standard error = 0.04) on test scores. The fully committed account yields no such educational improvements, and neither account finds impacts on secondary or downstream outcomes such as attendance, enrollment, or non-cognitive skills.
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