Pay me later: Savings constraints and the demand for deferred payments

Lasse Brune, Eric Chyn, Jason Kerwin

Research output: Contribution to journalReview articlepeer-review

2 Scopus citations


We study a simple savings scheme that allows workers to defer receipt of part of their wages for three months at zero interest. The scheme significantly increases savings during the deferral period, leading to higher postdisbursement spending on lumpy goods. Two years later, after two additional rounds of the savings scheme, we find that treated workers have made permanent improvements to their homes. The popularity of the scheme implies a lack of good alternative savings options. The results of a follow-up experiment suggest that demand for the scheme is partly due to its ability to address self-control issues.

Original languageEnglish (US)
Pages (from-to)2179-2212
Number of pages34
JournalAmerican Economic Review
Issue number7
StatePublished - Jul 2021

ASJC Scopus subject areas

  • Economics and Econometrics


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