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Field
Abstract
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Before
What is the consumption, debt and balance sheet response to increased savings? The budget constraint requires that every dollar saved should decrease consumption (or increase debt). Do individuals cut on groceries or human capital investments in response to increased savings? Do minimum savings requirements such as IRAs decrease liquidity and induce expensive borrowing through credit cards? This project revisits such foundational questions on the consumption/savings interplay in the retirement savings context. We propose a research design that would allow to answer these questions directly via a field experiment in Turkey. Through a large local financial institution, I randomly nudge a few thousand individuals via a phone solicitation to increase their savings through a retirement savings account, and track their consumption, debt and balance sheet responses.
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After
What is the consumption, debt and balance sheet response to increased savings? The budget constraint requires that every dollar saved should decrease consumption (or increase debt). Do individuals cut on groceries or human capital investments in response to increased savings? Do minimum savings requirements such as IRAs decrease liquidity and induce expensive borrowing through credit cards? This project revisits such foundational questions on the consumption/savings interplay in the retirement savings context. We propose a research design that would allow to answer these questions directly via a field experiment in a European financial institution. Through a large local financial institution, we randomly nudge a few thousand individuals via a phone solicitation to increase their savings through a retirement savings account, and track their consumption, debt and balance sheet responses.
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