@article{187f830510ab4dd7b08643f9c02e3bd8,
title = "How Debit Cards Enable the Poor to Save More",
abstract = "We study an at-scale natural experiment in which debit cards were given to cash transfer recipients who already had a bank account. Using administrative account data and household surveys, we find that beneficiaries accumulated a savings stock equal to 2% of annual income after two years with the card. The increase in formal savings represents an increase in overall savings, financed by a reduction in current consumption. There are two mechanisms. First, debit cards reduce transaction costs of accessing money. Second, they reduce monitoring costs, which led beneficiaries to check their account balances frequently and build trust in the bank.",
author = "Pierre Bachas and Paul Gertler and Sean Higgins and Enrique Seira",
note = "Funding Information: Pierre Bachas is at Development Research Group, World Bank. Paul Gertler is at Haas School of Business, UC Berkeley. Sean Higgins is at Kellogg School of Management, Northwestern University. Enrique Seira is at Department of Economics, ITAM. We are grateful to officials in Mexico's government bank Bansefi and the conditional cash transfer program Prospera (formerly Oportunidades) for sharing data and answering numerous questions. At Bansefi, we are indebted to Gabriel Caba{\~n}as, Miguel {\'A}ngel Lara, Oscar Moreno, Ram{\'o}n Sanchez, and especially Benjam{\'i}n Chac{\'o}n and Ana Lilia Urquieta. At Prospera, we are indebted to Martha Cuevas, Armando Ger{\'o}nimo, Rodolfo S{\'a}nchez, Carla V{\'a}zquez, and especially Rogelio Grados, Ra{\'u}l P{\'e}rez, and Jos{\'e} Solis. For comments that greatly improved the paper, we thank David Atkin, Alan Barreca, Richard Blundell, Chris Carroll, Carlos Chiapa, Shawn Cole, Natalie Cox, Pascaline Dupas, John Edwards, Gerardo Escaroz, Fred Finan, Jess Goldberg, Emilio Gutierrez, Jens Hainmueller, Anders Jensen, Anne Karing, Dean Karlan, Supreet Kaur, Leora Klapper, David Laibson, Ethan Ligon, John Loeser, Nora Lustig, Jeremy Magruder, Justin McCrary, Atif Mian, Ted Miguel, Doug Nelson, Christine Parlour, Jaime Ruiz‐Tagle, Betty Sadoulet, Todd Schoellman, Jonathan Zinman, and numerous seminar participants. We are also grateful to Ignacio Camacho, Ernesto Castillo, Oscar Cuellar, Bernardo Garc{\'i}a, Austin Farmer, Joel Ferguson, and Isaac Meza for research assistance. Gertler and Seira gratefully acknowledge funding from the Consortium on Financial Systems and Poverty and the Institute for Money, Technology & Financial Inclusion. Higgins gratefully acknowledges funding from the Fulbright–Garc{\'i}a Robles Public Policy Initiative and National Science Foundation (Grant Number 1530800). The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. The authors have read 's disclosure policy and have no conflicts of interest to disclose beyond the data and funding sources described above. The Journal of Finance Publisher Copyright: {\textcopyright} 2021 The Authors. The Journal of Finance published by Wiley Periodicals LLC on behalf of American Finance Association.",
year = "2021",
month = aug,
doi = "10.1111/jofi.13021",
language = "English (US)",
volume = "76",
pages = "1913--1957",
journal = "Journal of Finance",
issn = "0022-1082",
publisher = "Wiley-Blackwell",
number = "4",
}