People in developing countries sometimes desire deferred income streams, which replace more-frequent income flows with a single, later lump sum. We study the effects of short-term wage deferral using a randomized experiment with participants in a temporary cash-for-work program. Workers who are assigned to lump-sum payments are five percentage points more likely to purchase a high-return investment. We discuss the role of both barriers to saving and credit constraints in explaining our results. While stated preferences for deferred payments suggest a role for savings constraints, the evidence is also consistent with a simpler model of credit constraints alone.
|Original language||English (US)|
|Number of pages||15|
|Journal||Journal of Development Economics|
|State||Published - May 2019|
- Credit constraints
- Financial inclusion
- Income timing
- Savings constraints
ASJC Scopus subject areas
- Economics and Econometrics
FingerprintDive into the research topics of 'Income timing and liquidity constraints: Evidence from a randomized field experiment'. Together they form a unique fingerprint.
Data for: Income Timing and Liquidity Constraints: Evidence from a Randomized Field Experiment
Brune, L. F. (Contributor) & Kerwin, J. T. (Contributor), Mendeley Data, 2019
DOI: 10.17632/kf3wy2k2bb.1, https://data.mendeley.com/datasets/kf3wy2k2bb