• Treatment 1: Receive a bank account; monthly wage payments paid into the account.
• Treatment 2: Receive a bank account; monthly wage payments in cash.
• Treatment 3: Receive a mobile money account; monthly wage payments paid to the account.
o Treatment 3a: A subset of workers without a phone will also be given a phone with their account and sim card.
• Treatment 4: Receive a mobile money account and sim card; monthly wage payments in cash.
o Treatment 4a: A subset of workers without a phone will also be given a phone with their account and sim card.
• Control: Monthly wage payments in cash (status quo)
To implement the proposed intervention, we will draw from a sample of approximately 3000 urban workers located at two factories in Dhaka, Bangladesh, all of whom currently receive their monthly wages in cash. The workers will be randomly assigned to one of six treatment groups or the control. Workers in the control group will continue to receive cash wage payments. Workers in the first treatment group (T1) will receive a no-frills bank account in their name, along with training on how to use the account and will be paid using electronic wage payments into the account. Workers in the second treatment group (T2) will receive a bank account and training about how to use the account, but will continue to receive their wages in cash. Workers in the third treatment group (T3) will receive a mobile money account, along with the training necessary to use the account, and will be paid using electronic wage payments into the bank account. Workers in the fourth treatment group (T4) will receive a mobile money account, along with the necessary training, but will continue to receive wage payments in cash.
In addition, we will randomly provide mobile phones to participants in the mobile money account treatment groups (T3a and T4a) who do not already own their own mobile phones. Workers in T3 who do not have their own mobile and are not randomly assigned to receive one, will be allowed to opt-in to the mobile payment scheme.
Our study will be carried out in four phases: In the first phase, we will administer an extensive baseline survey. In addition to information on demographics, household income and consumption, the baseline will include modules on formal and informal credit, financial literacy, savings, savings goals, credit, time and risk-preferences and risk-sharing and remittance networks.
After baseline is complete, we will begin the process of opening bank and mobile money accounts for treatment groups. Second, we will administer several follow-up surveys that ask about monthly consumption, remittances, savings, and credit use to all study participants. These high-frequency consumption surveys will be repeated on an ongoing basis over the entire duration of the study and will provide measures of the variance of consumption faced by workers. Third, we will conduct an extensive end-line survey, approximately nine months after the last accounts have been opened. The end-line will follow up on characteristics measured in the baseline and recurring surveys and will pay special attention to changes in patterns of borrowing, including demand for high cost informal loans, saving, remittances and consumption that could have been affected by the intervention. We will also measure worker job satisfaction. Administrative data from the factories will allow us to measure attendance to accurately track attrition and other measures of job performance.
Finally, in the fourth stage, we conduct an additional experiment on short-term savings and consumption smoothing. All endline participants at one factory will receive a participation bonus, announced for all workers at the same time. By varying the timing of the receipt of this bonus, we can measure the extent to which workers are financially constrained at the end of the month and whether previous access to electronic wage payments affects the level of financial constraints. We randomly assign workers to one of two treatment groups, and stratify by EWP treatment:
T1: Receive bonus one week before pay day
T2: Receive bonus on pay day
A Short follow-up survey with treated workers will be conducted in the days immediately before and after pay day in which we measure the use of informal and formal credit, financial shocks, food and non-food consumption. We also conduct evaluations of worker performance with factory supervisors. Supervisors rate the workers on various standards of performance and efficiency. Each worker will be evaluated twice: mid-month, and directly before pay day. This will allow us to detect variation in performance at the end of the month caused by financial constraints.