Intervention(s)
This study is a Randomised Control Trial, wherein we offer a bank-based recurring deposit (RD) to production workers of Shahi Exports, a garment manufacturing firm in Karnataka, India. The RD would serve as a commitment saving instrument for workers, requiring fixed monthly instalments for 6 months. In our study, these instalments would be made from the workers’ salary through automatic payroll deductions facilitated by Shahi, their employer. Further, for some workers savings in their RD would be linked to and rewarded based on their tenure and attendance. With this set-up, the study is aimed at understanding if performance-linked employer-enabled commitment saving plans can simultaneously improve i) formal savings of low-income workers and ii) firm performance.
Along with a control group, the study involves three treatment groups. The first treatment group only receives access to the RD and automatic deductions in it. Second and third treatment groups, in addition to the RD and payroll deductions, also receive rewards linking their savings and performance. Comparing these groups, we evaluate the causal impact of each component of the savings plan on workers’ savings in the plan, their total savings and on workplace outcomes in terms of attendance and tenure.