[VIDEO] Does Commitment Savings Alter Seasonal Poverty Dynamics among the Ultra-poor? Evidence from High-frequency Data

Event: KDIS-3ie-ADB-ADBI Conference on Impact Evaluation - Challenges and Promise for Human Capital Development in Asia

[VIDEO] Does Commitment Savings Alter Seasonal Poverty Dynamics among the Ultra-poor? Evidence from High-frequency Data

17 November 2020
Author / Speaker: 
Kazushi Takahashi, National Graduate Institute for Policy Studies - Other materials by the author

 

While the seasonal dimension of poverty is well discussed, little is known about its degree and countermeasure for the ultra-poor population. Using unique bi-weekly data for 10months over two years from rural Bangladesh, we first show that consumption of the year round ultra-poor is subject to large seasonal
fluctuations, with a significant decline during the agricultural lean period. We then conducted a randomized controlled trial to examine whether time-locked commitment savings schemes can prevent the fallin consumption. We randomly offered households commitment-savings products, either with market (8% per annum) orpremium (50%) interest rates. Compared with the control group, we observed that premium-interest account holders increased consumption by 7-12% during the hungry season; its effect, however, did not last long. Typical market-interest account holders did not show any consumption impacts. These findings suggest that access to commitment savings alone is ineffective to smooth consumption of the ultra-poor.

Geographical Focus: 
Bangladesh
Type of Content: 
Learning Event

Disclaimer

The views expressed on this website are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent. ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. By making any designation of or reference to a particular territory or geographic area, or by using the term “country” in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.