Week of September 23, 2013

After a short break, New and Noteworthy returns with a discussion on financial literacy, the true cost of cash, and the status of payment systems around the world.
 

• A new report from the Gates Foundation compares payment systems in more than 30 countries incorporating insights from more than 100 interviews with regulators and payments providers from around the world, including banks and telecommunications companies. It includes in-depth investigations in six countries – China, India, Kenya, Nigeria, the Netherlands and the United States.
   
• A blog post from the Harvard Business Review reports on the current status of the world’s women entrepreneurs, who now represent owners of 37% of SMEs globally.
   
• A US-based company called RoboCoin announced it will launch kiosks throughout Canada that allow customers to convert Bitcoins into cash.
   
• The New America Foundation released a report arguing that America has moved from a High Wages-Low Prices-Welfare system to a Low Wages-Low Prices-Tax Break system. The report highlights the drawbacks of this new system and offers some alternative structures.
   
• The New Yorker reviews a recent study by The Fletcher School at Tufts that shows low-income Americans spend an average of more than three times as much as their high-income counterparts to access cash.
   
• Can soap operas be a force for social change? According to The World Bank, there is evidence to suggest they can. A study in South Africa shows viewers of a popular television show Scandal! improved their financial literacy and behavior after watching episodes that incorporated financial education messages. On a related note, The World Bank blog explores the difference between financial literacy and financial capacity.
   
• This past week, the US Census Bureau released its annual report on poverty rates in the US. While the figures provide a snapshot of the economic situation in America, NPR reminds its listeners that the poverty rate does not include income from benefit programs such as food stamps and also does not take into consideration differences in cost of living for various localities.
   
• A new mobile payment service focused on Latin America called Regalii allows individuals to transfer funds by purchasing “mobile gift cards” at specific retailers—so that remittance senders can control where funds are spent. 

Week of September 9, 2013

In this week’s New and Noteworthy, mobile money is inspiring innovations in Kenya and new research points to the link between poverty and how the brain works.

• Last week Anandi Mani et al. released a study showing a link between poverty and decision-making ability based on changes in cognitive functions of Indian sugarcne farmers over a growing cycle. Two of the lead authors (Sendhil Mullainathan and Eldar Shafir) also released a book, Scarcity, which further explores the impact of poverty on mind-set and psychology.

• In The World Bank’s Development Impact Blog, David McKenzie recently explored the role of clinical equipoise in RCT development trials, that is – whether researchers have the obligation to prove the uncertainty of the expected impact of an intervention and to what degree.

• Recently a company called Kipochi launched an e-wallet service in Kenya, allowing international transfers via Bitcoins. The move has the potential to integrate M-Pesa with international services but some have concerns regarding security and regulatory issues.

• In a different part of Kenya, innovations in mobile money are expanding energy access in slums. The start-up access:energy uses wind turbines and solar panels to create “microgrids” in informal settlements, starting with one on Remba, an island in Lake Victoria. Users can pay for energy use using their mobile phones.

• Should we be looking to the pump when thinking about loan pricing? Recent blog posts from CFI and Microfinance Transparency use a gasoline analogy in discussing different (but related) issues. CFI explores a new Chilean system of reducing terms and conditions of loans into a two-digit number while Azish Filabi of the FRBNY looks at the issue of pricing transparency and consumer protection in Africa’s mircrofinance industry.

• In the wake of recent national debates around food stamps in the US, Al Jazeera published an in-depth profile of the complexities around the system, including for those who are fraudulent.

• A new study from the Center for American Progress shows that children growing up in regions in the US with higher rates of an economic middle class are more likely to move out of poverty than in regions where income inequality is high.

Week of September 2, 2013

In this edition of New and Noteworthy, we are highlighting the predictive power of economics, regulatory action around Bitcoin, and the intersection of privacy, technology and “mobile for development” programs.

• Last week, the U.S. marked the 50th anniversary of Martin Luther King Jr.’s famous “I Have a Dream” speech. While much has been made in terms of civil rights progress, a new survey from Pew Research shows the widening gaps between blacks and whites in terms of financial and economic well-being.
   
• Alex Rosenberg and Tyler Curtain wax philosophic in this New York Times opinion piece on the predictive power of economics and what that means for the next Federal Reserve Chairman.
   
• In much of the developing world, the adage of keeping money under the mattress is quite literal – often cash is kept in safe boxes or other hiding spots in the home.  A new IMTFI blog post addresses why the poor continue to keep money at home even if bank accounts are accessible.

• A recent report from the New America Foundation discusses principles of privacy and security in a time when mobile technology is gaining immense popularity in international development projects.
   
• Forbes reports that in the wake of a recent ruling by a federal judge declaring Bitcoin as real currency, the New York State Department of Financial Services subpoenaed 22 digital-currency companies and investors asking for information regarding a host of topics including money laundering controls and consumer protection practices.
   
• The future of banking may look like “a cross between an Apple Store, a Starbucks and a W Hotel lobby,” according to this article on the expansion of Umpqua Bank’s “bank-as-community” retail model.

Week of August 26, 2013

On a special Monday edition of New and Noteworthy, we find some new insights into debates we’ve covered at FAI in the past – the ethics of RCTs, the pros and cons of social impact bonds, the hype of cash transfer programs, and using behavioral economics to inform policy.

• In response to a recent feature on This American Life focused on the work of Heifer International and GiveDirectly, Chris Blattman wrote a blog post both advocating for cash transfer but also exploring the ethics of RCTs.
   
• Meanwhile Berk Ozler at the World Bank explores the data and research behind the hype of transfer programs.
   
• Social Impact Bonds are gaining traction in the social investment sector but not without critics. Recently Adrian Brown wrote “cashable savings” undermines the bonds while Steve Goldberg counters that funders should just be more selective when using this tool.

• Stephen Colbert puts a humorist twist on the recent news that President Obama assembled a team of behavioral economists to advise his administration.

• Zeti Akhtar Aziz, Governor of Bank Negara Malaysia, recently wrote an opinion piece that makes the case for using proportionate regulation (regulation associated with various levels of risk) to advance financial inclusion and foster innovation in developing countries.
   
• Microfinance products like savings accounts and loans have many applications, not just funding small businesses. For example, a new smart card helps women with maternal health and family insurance, The New York Times explores applications in providing access to water and sanitation, and farmers may seek to benefit from mobile money applications.

• Finally, The New York Times notes that pawn shops are aggressively adding financial services to their list of offerings—and customers are responding by doing more of their “banking” at such outlets.

Week of August 16, 2013

This week’s new and noteworthy includes new perspectives on ongoing debates, including the US’ Social Security system, Social Impact Bonds, and the intersection of behavioral economics and policy.
 

• In December 2010, the Indian state of Andhra Pradesh passed a law that severely restricted the operations of micro-inance institutions. New research from Renuka Sane and Susan Thomas measure the impact of microcredit withdrawal and find that average household expenditure dropped by 19 percent relative to a control group after the ban with some evidence of higher volitity in consumption.

• In discussing financial services and microfinance, it is easy to get caught up in talk of numbers like interest and repayment rates. However, Alejandro Drexler reminds us that much of the day-to-day impact of MFIs is built on relationships, particularly between the loan officer and the borrower. His recent research focuses on the importance of interpersonal relationships in the lending process.

• FAI affiliate and co-founder Sendhil Mullainathan explores the complexities and trade-offs in health care economics, including the impact of an economic concept called moral hazard, in this New York Times piece. To learn more about moral hazard, check out our new video on the topic. We also welcome your feedback on our #FAI101 series in the comments section or on Twitter - @financialaccess. 

• Robert Townsend published a new paper addressing various meanings of “accounting for the poor,” including valuing their economic contributions to GDP. The working paper version is available here.
   
• There has been a lot of buzz lately about Social Impact Bonds but MaRS Centre Fellow Jessica Leifer explores whether their popularity could increase a phenomenon called “cream skimming” (think reverse brain drain).
   
• Recently MTFI fellows Ishita Ghosh and Kartikeya Bajpai released the second part in their blog series on the intersection of remittances, savings, and mobile money. Part one is located here.
   
• Speaking of mobile money, a new smartphone app helps to control spending by tracking what you don’t buy. Earmark allows users to log all of the times they passed up that morning latte or cab ride home to see how much they are saving over time. The app also has a goal-setting feature to keep users motivated and allows them to pin big-ticket items they can buy using all those saved funds.
   
• A new report from the Institute for Women’s Policy Research illustrates the share of income Social Security provides to different gender, age, race/ethnic, and marital groups, while also highlighting other sources of income for the US’ growing elderly population.
   
• In the current version of the Stanford Social Innovation Review, Paul Brest and Kelly Born answer the question “When Can Impact Investing Create Real Impact?”

Week of August 9, 2013

This week’s "New and Noteworthy" includes several stories on the intersection of banking and technology. Emerging trends show more people relying on digital platforms for financial services, including sending money home.  While technology has the potential to reach the unbanked, CGAP reminds us not to forget social inclusion as we work toward this goal.

• What's next for Grameen Bank? A government commission was said to be planning an announcement that it would take a controlling stake in the bank, diluting existing shareholders and perhaps breaking the bank up. Since that story emerged, the government of Bangladesh has denied it, but does seem to say that it will change the governance of the bank. How that is materially different than taking 51% ownership remains to be seen. 
• NPR’s Marketplace reported on a new program being developed in Washington, D.C. is that will require individuals in homeless shelters to set aside part of any income into savings accounts.
• David Bauer created a beautiful visualization of the evolution of worldwide remittances since 1970.
• In an interview with GSMA, Professor Njuguna Ndung’u, Governor of the Central Bank of Kenya, discusses the impact and challenges to the growing mobile money sector in his homeland.
• Less than 1% of participants in the Juntos transfer program in Peru knew what a bank statement, a voucher, or an interest rate was, points out Carolina Trivelli on the CGAP blog. Her post focuses on the symbiotic relationship between social inclusion and financial inclusion.
• According to the Pew Research Center, 51% of US adults bank online and 32% bank using their mobile phones. Click here for the full report on the changes in US banking habits and technology.
• A new paper provides insights into the post-midlife spending “hump” while CFI provides a deeper dive into life cycles and financial needs.
• The talk of “Big Data” seems to be everywhere these days – including the UN. This profile on the Global Pulse department highlights the impact of data on development.
• MoneyGram announced that PayPal customers can now withdraw or deposit money from their PayPal accounts at physical MoneyGram locations. With the link-up, users in the United States will have the ability to shop online, send gifts and receive physical cash without a bank account. 
• Another new service for the unbanked in the news is Puddle, an app that allows users to extend small loans and informal “banking” services to those in their social network.
• ProPublica released two new articles on payday lending in the U.S. in its Debt Inc. series.  One talks about regulation and the fight for lenders to stay legal while the other focuses on Washington’s attempt to restrict lenders.

Week of August 5, 2013

Innovations in banking technology can have both positive and negative consequences for customers as shown by this week’s edition of New and Noteworthy. While a parallel currency system promotes business in a Kenyan slum and online tools help map financial inclusion, customer data on banking errors can increase the number of unbanked.

• In the footsteps of M-Pesa, slum dwellers in Kenya are creating their own currency system called Bangla-Pesa. Bangla-Pesa is a system of vouchers with designated values. The vouchers are honored as a means of exchange for goods and services within the confines of the Bangladesh slum in Mobasa and help businesses remain operational even during downturns in their regular business volume.
   
• Earlier this month, the Bill and Melinda Gates Foundation released an interactive tool to improve the way financial access is measured and tracked around the world. The CGAP team posted an analysis of some of the data from Nigeria, Uganda, and Tanzania to get a better picture of financial inclusion in those countries.
   
• While banking errors like bouncing a check or overdrawing from an account might seem minor, they can actually blacklist low-income customers from formal financial institutions, according to The New York Times. Banks have been using customer databases for over 20 years to assess high-risk customers but consumer advocacy groups say this method disproportionately affect lower-income individuals and increases the number of unbanked Americans.

• According to new research, there is evidence that early life financial stress can lead to health issues later in life, even in cases of upward economic mobility.
   
• Recently the Board of Governors of the US Federal Reserve System released a report on the prevalence of prepaid cards in government-administered payment programs and their subsequent fees. While 94 government offices and 186 programs issued $136 billion through prepaid cards, this sum accounted for just 13.4 percent of the total payment funds.
   
• In an article for Forbes.com, Ann Harrison of the Wharton school asserts if firms in Africa had an “even playing field” (i.e. better infrastructure, governance, and access to capital), they would outperform their Western counterparts.
   
• According to the US Census Bureau, 49 cities (with populations greater than 100,000) had significant declines in poverty rates when off-campus college students were excluded from the calculations.

Week of July 29, 2013

Recent political debates in the US include raising student loan interest rates, reforming immigration policies, and raising the minimum wage. This week’s New and Noteworthy highlights nuanced economic aspects of these issues and also looks abroad to a profile of programming reaching India’s ultra-poor as well an analysis of financing for women-owned SMEs.

• In light of the recent debate on raising the federal minimum wage, The Pew Research Center released demographic data on who makes minimum wage in the US. The findings show minimum wage earners are disproportionately young, mostly white, and predominately part-time workers.  
   
• A new report from Sallie Mae shows that parents are contributing less to college costs than in the past, but as NPR’s Marketplace points out, low-income families are actually having to pay more than their high-income peers.
   
• USAID created a slick new infographic (based on this recent report ) showing gendered breakdowns of loan information for SMEs in the developing world.
   
• Why was anesthesia an overnight success in the medical community but antiseptics took years to become commonplace? What can the trajectories of both innovations tell us about the spread of ideas, particularly in addressing development challenges? Atul Gawande answers both questions in his piece on innovation and information sharing for The New Yorker.
   
• In what is being billed as “the most detailed portrait yet of income mobility in the United States,” a new study from researchers at The Equality of Opportunity Project shows that location matters when it comes to the likelihood of upward economic mobility.
   
• Ignacio Mas and Kim Wilson question the labels of financial inclusion/exclusion and their implications in a post for the CFI Blog. They turn the debate on opening formal financial services around and ask the question of whether this is meeting the needs and desires of the poor.
   
• Social enterprise and microfinance often aims to target the “poorest of the poor,” or those at the bottom of the pyramid earning less than $1.25 a day.  However, in an article for the Stanford Social Innovation Review, Bo Hopkins and Abi Olvera argue the pyramid is segmented, with the highest investment potential located in the $3 to $16 per day income level.
   
• Banerjee et al. published results of a study on how information regarding microfinance travels through villages in India in the new edition of Science.
   
• For those who are interested in the bottom of the pyramid, programs that target the “ultra-poor” have shown promising results. In the newest edition of the Financial Time’s Urban Ingenuity publication has a profile of one such program in India, administered by a partnership between Parinaam and Ujjivan.

Week of July 22, 2013

This week’s New and Noteworthy highlights trends in international remittances, the potential of social stock exchanges, and insights into the financial lives of Delhi’s rickshaw pullers.

• In the wake of the House of Representatives’ passing a massive agricultural and food bill that did not include funding for supplemental nutritional assistance (commonly known as food stamps), Pew Research released a political and demographic snapshot of America’s food stamp recipients.
   
• CGAP released two new studies:  One provides an overview of new trends in international remittances through mobile or branchless banking platforms and the other reviews financial data from hundreds of MFIs to look at interest rates and the costs and profits that drive them.
   
• Can social stock exchanges make development financing democratic and accessible? That’s the question Devex explores in its overview of the impact investing sector and launch of London’s Social Stock Exchange at the recent G8 summit.
   
• Telecom operator Orange announced recently that is it launching a new service called Orange Money International Transfer. The mobile money transfer function will allow users in three different countries (Cote d’Ivoire, Senegal, and Mali) to send money via their mobile phones to any other Orange customer in those countries.

• During the most recent World Bank Policy Research Talks Series, David McKenzie challenges us to “rethink informality” in his presentation on SMEs in the informal sector.
   
• Mani Nandhi, a researcher at the Institute for Money, Technology, and Financial Inclusion, has a fascinating blog series highlighting barriers to mobile money adoption among rickshaw pullers in Delhi. Parts one and two of the series offer personal insights and in-depth profiles of two such men, which include their own challenges and reflections on mobile banking.
   
• In the Financial Times, Ramachandra Guha reviews Amartya Sen and Jean Drèze’s new book, India: Economic Development and Social Opportunity, on the Indian state’s role in increasing equality and providing social services.

Week of July 15, 2013

We have a special bonus edition of New & Noteworthy this week with a new report on the stats of global financial inclusion, various perspectives on the challenges of mobile money adoption, and an ongoing debate on a possible repayment crisis in Tamil Nadu.

• This week CGAP released its Financial Access 2012 report, a comprehensive view of access to financial services and financial inclusion around the world based on eight years of data from the IMF’s Financial Access Survey (FAS).
   
• Challenges in mobile banking and payments was definitely a hot topic this week:
  • As new products like Square Wallet make payments incredibly convenient and practically invisible, Elizabeth Dunn and Michael Norton question the value on spending habits and happiness levels;
  • Ignacio Mas explores the demand and supply factors into why the progress of mobile money has not been a smooth one for CGAP (and continues the conversation in the blog comments.);
  • Felix Salmon asserts his skepticism that mobile payments will replace credit cards in the US;
  • And new research highlights some of the hidden costs and social meaning of mobile payments  for the poor in Kenya.

• Fast Company posted some fascinating infographics displaying the world’s airports as a measure of global inequality.

• The Family Budget Calculator from the Economic Policy Institute measures the income a family in the US needs in order to attain a secure yet modest living standard by estimating community-specific expenses. You can see what a city or town requires but in all cases, families need more than twice the income of the federal poverty line to make ends meet.
   
• Recently on the FAI Blog, Daniel Rozas discussed avoiding a potential repayment crisis in Chiapas, Mexico. At the same time, a similar debate is occurring regarding repayment issues in the Indian state of Tamil Nadu:
   
  • Isabelle Guérin raises questions about strategic defaults and over-indebtedness among the poor in the state.
  • Vaibhav Anand from IFMR Capital presents field data and highlights regulatory developments to counter the assertion of a repayment crisis.
  • Back on the CGAP blog, Shweta Banerjee presents an analysis of this debate and leaves readers to ponder “Is repayment or default of a microfinance loan an adequate indicator of over-indebtedness in markets where the range of credit tools used by clients is as diverse and complex as those available in Tamil Nadu?"

• In a compelling blog post for CGAP, Kim Wilson imagines a global financial ecosystem that combines the “transparency, safety, convenience, reliability, fair pricing, and privacy” of formal banking institutions without the expenses of that system. She asserts that technology could be harnessed to make this vision a reality.
   
• CRISIL of India released the results of its Inclusix project, a “comprehensive index for measuring the progress of financial inclusion in the country, down to the district-level.” Data collected between 2009-2011show an under-penetration of formal banking across India and an overall country score of40 on a scale of 100.
   
• A recent study from the Institute for Children, Poverty, and Homelessness highlights a neglected part of the gentrification debate - why displacement of residents can lead to increased homelessness. The research concludes that low-income families priced out of trendy neighborhoods create intense competition in economically depressed areas. As The New York Times points out, “in a scenario like this one…the poor are not simply competing with wealthier newcomers for limited housing; the poor are competing with one another.”

• As companies move away from paper paychecks and direct deposit, hourly workers are feeling the pinch of fees from prepaid cards, according to the The New York Times. In some instances, workers end up making less than minimum wage after these fees are taken into account.
   
• Legislators and policy makers often try to promote “good” behavior through economic or other incentives but Evan Selinger explores when encouraging certain behavior becomes coercive in "When Nudge Comes to Shove."

Week of July 8, 2013

This week’s New & Noteworthy covers two weeks due to the July 4th holiday in the US. The list is long and includes: some great visualizations of how the world’s population will grow in the future and what it currently eats in the present; lots of new information about the evolution and future of microinsurance; a new paper on the long-term impact of savings subsidies and intra-household bargaining; financial inclusion and the development agenda; and research on the downside of electronic payments.

• Kristie Wang of Ashoka reviews new microinsurance products that offer more specialized services like coverage for chronic disease, options for frequent, low-cost health issues, and subsidized preventative care.

• Can a short-term increase in savings have long-term impacts? Simone Schaner sought to answer that question through a RCT in rural Kenya. Her research focuses on the impact of interest subsidies on household finances and shows some promising results. David McKenzie shares his perspective on the findings on the Development Impact blog.
   
• Social entrepreneurship is an increasingly trendy field but Daniel Ben-Horin challenges the sector to remember the less sexy, day-to-day work and lasting commitment that is required to be sustainable in parts one and two of his series for Stanford’s Social Innovation Review.
   
• Elizabeth Rhyne, Managing Director of the Center for Financial Inclusion, reviews the recommendations from the recent High-Level Panel of Eminent Persons on the Post-2015 Development Agenda, specifically the incorporation (or lack thereof) of the role of financial inclusion.
   
• The Loss and Damage in Vulnerable Countries Initiative released a new review of the microinsurance landscape in Bangladesh, highlighting the potential for customized products to address the negative impacts of climate change, particularly among the poor. 
   
• This Washington Post article reviews a recent study from the Consumer Financial Protection Bureau on overdraft programs from the nation’s banks.
   
• The SWIFT Institute released a summary of its spring conference on financial inclusion at Harvard’s Kennedy School of Government.
   
• Ignacio Mas, an FAI affiliate, questions the common belief that the poor need financial education in his recent blog post for the World Bank’s Private Sector Development blog.
   
• A fascinating photo essay from Peter Menzel shows what a week’s worth of groceries looks like around the world.
   
• In 2050, India will surpass China as the most populous nation in the world according the UN’s latest population projections.
   
• Women’s World Banking released a manual to provide guidance for MFIs on implementing its Gender Performance Indicators. These indicators are meant to improve outreach and service delivery for women borrowers.
   
• Azuri Technologies developed and manufactures the IndiGo solar kit, which is available for purchase in Kenya via mobile phone. After an initial deposit of 1,000 shillings (roughly $11), users make weekly payments before fully owning the system.
   
• Derek Thompson of The Atlantic provides an overview of research that claims that the use of electronic payments technology (such as credit cards) versus cash makes it harder for people to make sound financial decisions and stick to budgets.

New Research from the American Economic Review

The American Economic Association (AEA) recently released the Papers and Proceedings issue of its journal American Economic Review, which presents selected papers from the AEA's annual meeting. The AER is one of the premier economics journals and has very broad coverage. For instance, you can learn everything you never knew you wanted to know about income and church attendance in nineteenth century Prussia. Happily, this volume also includes a number of papers relating to mobile money, credit, savings, and insurance.

Mobile Money

In their study, William Jack, Adam Ray, and Tavneet Suri investigate how households using M-PESA interact with and exploit their informal networks when making transactions. The authors find M-PESA users have more remittance activity, make transfers over distances greater than 100 km, and have more reciprocal transactions than non-users.

While Jack et al. looked at volume of transactions, David Weil and Isaac Mbiti used aggregate data in their research on the velocity of mobile money. One of the more intriguing findings is that withdrawals are made frequently and in small amounts, even though users can reduce fees if they group withdrawals. As the use of mobile money grows in other countries (M-PESA recently launched in India, for instance) it will be interesting to see how similar these (and previous) findings are in different cultural contexts.

Gender and Finance

Using data from over 30,000 firms in 90 developing countries, Elizabeth Asiedu, Isaac Kalonda-Kanyama, Leonce Ndikumana, and Akwasi Nti-Adde analyze whether gender is a determinant in financing constraints and access to credit for firms. They find that indeed, female-owned firms are more likely to be financially constrained than male-owned counterparts but only in the sub-Saharan African region. There is no gender gap in other regions but small firms are more likely to be financially constrained than larger firms, and foreign-owned firms are less likely to be constrained than domestically owned firms.

Moving from the macro to the micro level, Carolina Castilla and Thomas Walker investigate gendered dynamics of intra-household financial decisions in their paper. In a field experiment in Southern Ghana, researchers conducted public and private lotteries with cash and in-kind prizes to observe the effects of these windfalls on household allocations. They found “husbands' public windfalls increase investment in assets and social capital, while there is no such effect when wives win. Private windfalls of both spouses are committed to cash (wives) or in-kind gifts (husband) which are either difficult to monitor or to reverse if discovered by the other spouse.”

Risk

We return to Kenya with Michael Kremer, Jean Lee, Jonathan Robinson, and Olga Rostapshova in their study on behavioral biases and firm behavior. Among a sample of Kenyan shopkeepers, those with lower math skills were less accepting of small-scale risk and were also less likely to have larger inventories than those with higher scores. There are some interesting observations in the paper on the connection between loss aversion and microfinance, suggesting that small business owners are less likely to access microcredit if risk averse and social safety nets could possibly help increase investment in these enterprises.

Similarly, Ahmed Mushfiq Mobarak and Mark R. Rosenzweig look at risk in the context of the Indian insurance market, specifically rainfall insurance. Their findings show that when insured farmers took greater risks, wage levels increased but so did the volatility of labor demand, creating a threat to landless workers. When offered the choice, landless workers also purchased insurance when contracts were offered to farmers.

Savings

Lastly, Suresh de Mel, Craig McIntosh, and Christopher Woodruff report the findings of their field experiment in rural Sri Lanka that tested the efficacy of various methods of collecting deposits in formal bank accounts. Although their research shows frequent, face-to-face collection increases aggregate household savings, collections using community lock boxes affected the number of transactions but not the overall level of savings.