IPA Random Update
LATEST RESEARCH & NEWS

ANNOUNCEMENT

IPA Congratulates 2019 Nobel Prize Winners Abhijit Banerjee, Esther Duflo, and Michael Kremer

"Congrats to the Nobel Prize-winning Team! Along with the large network of researchers they have created, these Nobel laureates have generated evidence that has benefitted millions of people living in poverty. We are so proud to be part of this movement of using a rigorous, evidence-based approach to fight poverty."

— Annie Duflo, IPA’s Executive Director

Read the full announcement here.

Learn about Banerjee and Duflo's new book and an upcoming launch event here.

NEW RESULTS

Social Norms, Resource Sharing, and Worker Incentives in Côte d’Ivoire

Researchers: Eliana Carranza, Aletheia Donald, Florian Grosset, Supreet Kaur

In many low-income countries, people face pressure from family and friends to share their earnings. While this dynamic can insure individuals in the face of shocks, it may also restrict labor productivity and economic transformation. In Côte d’Ivoire, researchers tested whether redistributive arrangements, by acting as a tax on earnings, lower people’s incentive to work. Workers were provided a direct-deposit illiquid savings account designed to make it easier to convert productivity increases into private long-term savings. Preliminary results show the intervention increased labor productivity and earnings by 10% (an 18% impact on workers who actually opened the accounts). However, if workers’ family members would learn about the existence of the savings accounts, take-up plummeted from 55% to 9%—consistent with redistributive pressure. The findings suggest that such pressures may contribute to low productivity in developing countries.

Read the full summary here.

FEATURED STUDY

Do Prize-Linked Incentives Help Americans Reduce their Debt?

Researcher: Jeremy Burke

Americans hold approximately 870 billion dollars in outstanding credit card debt. High levels of debt are financially problematic and levels grow as they remain unpaid. Researchers tested a "prize-linked incentive" model for debt reduction in which participants are entered into a lottery to have a portion of their debt paid off. Prize-linked incentive programs have become a popular approach in the U.S. and abroad to improve financial behavior. The study found that the prize-linked incentive was popular: three-quarters of those offered the incentives took them up. Takers were timelier with repayment and paid off more debt. However, the effects were driven by selection: there was no impact on those randomly offered the incentive program. These results suggest that prize-linked incentives may simply attract individuals who are already more likely to repay their debts, and not actually change behavior.

Read the full summary here and the working paper here.

Watch the IPA webinar on this study here.