Personal Financial Planning and Willpower Among Manufacturing Workers: Experimental Evidence from an Ethiopian Industrial Park
Last registered on March 30, 2018

Pre-Trial

Trial Information
General Information
Title
Personal Financial Planning and Willpower Among Manufacturing Workers: Experimental Evidence from an Ethiopian Industrial Park
RCT ID
AEARCTR-0002806
Initial registration date
March 26, 2018
Last updated
March 30, 2018 12:11 PM EDT
Location(s)
Region
Primary Investigator
Affiliation
Department of Economics, European University Institute
Other Primary Investigator(s)
Additional Trial Information
Status
In development
Start date
2018-03-27
End date
2019-01-31
Secondary IDs
Abstract
Jobs in the garmenting industry are often seen as a potential pathway out of poverty for low-skill workers in developing countries, not least because they provide a stable income. The ability of workers to translate this stable income into welfare gains, however, depends on their ability to make financial decisions that are in their own short- and long-term interests. In this study, I work with women who start a job in a large industrial park outside Addis Ababa, Ethiopia. I design an intervention with the goal of helping them plan their finances, track their income and consumption, and follow through on self-set financial goals. Theoretically, the plan can be seen as a cognitive rule that relies on self-monitoring. I cross-randomize a light-touch information intervention designed to make workers "sophisticated" regarding their time preferences. Ultimately, I hope to improve workers' confidence in their own ability to manage their finances and their exercise of self-control. I primarily plan to analyze the intent-to-treat effects of these interventions (and their interaction) on individual consumption and savings decisions. I also plan to study measures of self-confidence that would speak to a theoretical framework in which workers' confidence in their own willpower may increase as a result of following the plan. As a secondary set of outcomes, I plan to use the longitudinal structure of the data to examine the relationship of economic circumstances, stress and affective states, and time preferences.
External Link(s)
Registration Citation
Citation
Meyer, Christian. 2018. "Personal Financial Planning and Willpower Among Manufacturing Workers: Experimental Evidence from an Ethiopian Industrial Park." AEA RCT Registry. March 30. https://www.socialscienceregistry.org/trials/2806/history/27453
Sponsors & Partners

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Experimental Details
Interventions
Intervention(s)
The main intervention of this study involves a financial planning exercise. As part of this exercise, workers are given a "personal financial journal" in the form of a small notebook. Workers are encouraged to use this journal to track of their progress vis-a-vis self-set goals.

Additionally, I cross-randomize a light-touch information intervention in which a subset of surveyed workers is informed about their own time preferences as measured in baseline survey.

This experiment is conducted as part of a larger data collection exercise registered in the AEA RCT Registry with ID AEARCTR-0002555. There is a sister paper, also part the same data collection effort and also registered with the AEA RCT Registry, entitled: "The Devil Is in The Pre-Tales: A Closer Look at Women's First Months in Industrial Work", that uses the same experimental design, but is primarily concerned with documenting the experience of newly hired women working in Ethiopian manufacturing.
Intervention Start Date
2018-03-27
Intervention End Date
2018-10-31
Primary Outcomes
Primary Outcomes (end points)
I collect longitudinal data on a number of different outcomes. I use this data to test hypotheses in five groups:

• Hypothesis Group A “Effects of plan intervention on savings and consump- tion decisions”
• Hypothesis Group B “Effects of plan intervention on self-confidence”
• Hypothesis Group C “Naïvety and sophistication”: The impact of the INFORMATION intervention and its interaction with the PLAN intervention on individual savings and consumption decisions and well-being outcomes.
• Hypothesis Group D “Economic conditions, stress, and time preferences”
• Hypothesis Group E “Heterogeneity of impacts”: The individual characteristics of subjects that may moderate the impacts measured above.
Primary Outcomes (explanation)
Details are set out in the submitted Pre-Analysis Plan.
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
I collect data in four steps: First, I conduct a lab-in-the-field experiment and baseline survey. Second, I follow workers using biweekly phone calls. Third, I repeat the lab-in-the-field experiment together with an endline survey. Fourth, I obtain administrative data from firm personnel records and for transactions on workers' bank accounts.

All primary data is collected using CAPI with ODK on Android tablet computers. All survey materials are translated into Amharic. All subjects are expected to speak Amharic to be eligble for work in the industrial park. Enumerators speak both Amharic and Oromiffa and can translate if needed.

At baseline, all study participants will be randomly assigned to one of five groups:
(1) a SURVEY CONTROL group in which we conduct baseline, high-frequency follow-up and endline surveys;
(2) a PLAN group in which we conduct the surveys, administer the personal financial planning exercise, and provide the financial planning booklet to subjects;
(3) an INFORMATION group in which we conduct the surveys and administer a light-touch information treatment on respondent time preferences;
(4) a PLAN + INFORMATION in which we conduct the surveys and administer both interventions;
and (5) a PURE CONTROL group in which we do not conduct any surveys or administer any treatment, but only rely on administrative data on each subject.
Experimental Design Details
Randomization Method
I randomize among all individuals starting employment in an industrial park outside Addis Ababa. Workers apply for work at the factory gate Monday through Saturday (t=-1). I use a listing of the workers who come on t=-1 to randomize between two groups. In group A, workers are approached to be interviewed and potentially receive one of the treatments. In group B, workers are only approached to obtain consent for the use of administrative data (PURE CONTROL). This randomization between group A and group B is done in an office using Microsoft Excel. On the next day when workers return for their first day of work (t=0), I randomize workers within group A into one of four group (SURVEY CONTROL, PLAN, INFORMATION, PLAN+INFORMATION). This randomization is done by the tablet computer used for interviewing, using two independent draws.

All interviewed subjects are eligible to win the payouts from a convex time budget experiment at baseline with a 50 percent chance. Randomization for this payout is done using a coin flip at the end of the interview. If subjects win the coin flip, they draw one of the 15 decisions that they made to determine the payout dates and amounts. This is done using numbered cards in a bowl.
Randomization Unit
I randomize at the individual level among workers who start employment in an industrial park outside Addis Ababa.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
Target sample size of 440 garmenting workers as part of the main study, with an additional 400 workers for which I only collect administrative data.
Sample size: planned number of observations
Target sample size of 440 garmenting workers as part of the main study, with an additional 400 workers for which I only collect administrative data.
Sample size (or number of clusters) by treatment arms
Target sample size by treatment arm as follows:
- 400 workers in PURE CONTROL
- 110 workers in SURVEY CONTROL
- 110 workers in PLAN
- 110 workers in INFORMATION
- 110 workers in INFORMATION + PLAN
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

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IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
New York University Abu Dhabi
IRB Approval Date
2018-03-25
IRB Approval Number
020-2018
Analysis Plan

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Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers