Latin America and Caribbean

  • Under-Savers Anonymous: Evidence on Self-Help Groups and Peer Pressure as a Savings Commitment Device

    Kast, Meier and Pomeranz (2012)

    Original Abstract:

    We test the effectiveness of self-help peer groups as a commitment device for pre- cautionary savings, through two randomized field experiments among 2,687 micro- entrepreneurs in Chile. The first experiment finds that self-help peer groups are a powerful tool to increase savings (number of deposits grows 3.5-fold and average savings balance almost doubles). Conversely, a substantially higher interest rate has no effect on most participants. A second experiment tests an alternative delivery mechanism and shows that effects of a similar size can be achieved by holding people accountable through feedback text messages, without any meetings or peer pressure.

    Intervention settings: N/A (location unspecified).

    Intervention description: Peer group pressure versus increase in the real interest rate. Text message reminders one year after accounts offered.

    Methodology: RCT.

    Sample: Low-income micro-enterprise owners in 196 micro-finance groups with savings accounts in the participating bank.

    Findings: Individuals in the peer group pressure treatment group saved 3.5 times more often and had more than twice the level of accumulated savings after one year. In contrast, a higher interest rate had almost no effect on savings. The text messages alone had almost as large an effect as peer group pressure. No gender specific effects are reported.

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  • Can Entrepreneurial Activity Be Taught? Quasi-Experimental Evidence from Central America

    Klinger and Schündeln (2011)

    Original Abstract:

    We study the effect of entrepreneurial training on enterprise outcomes, in particular whether business training for (potential) entrepreneurs of small- and medium scale enterprises can lead to an increase in the number of business start-ups or an expansion in the size of existing businesses. We study this question by analyzing the results of business training programs that an NGO held in Central America between 2002 and 2005. To deal with endogenous selection into the training program, we exploit the fact that a fixed number of applicants are taken into the training program based on a pre-training score, which creates a discontinuity around which we can compare accepted and rejected applicants and estimate the effect of training with a regression-discontinuity design. We find that receiving business training significantly increases the probability that an applicant to the workshop starts a business or expands an existing business. Thus, entrepreneurial activity such as starting and expanding businesses can be fostered by training. Exploiting the fact that in the last stage the most successful participants of the program receive substantial monetary prizes (between US$ 6,000 and 15,000) we can also provide some experimental evidence that suggests the presence of financial constraints. Finally, we investigate gender differences, and find that females experience a much larger increase in the probability of starting a business if they win the monetary prize than men, suggesting financial constraints may be significantly larger for female entrepreneurs.

    Intervention settings: Not reported.

    Intervention description: TechnoServe business training program implemented between 2002-2005. The program is intended for both individuals who wish to start a business, as well as for those who already have a business. Those individuals with existing businesses have about 10 employees on average. Thus, unlike some other programs, this program targets businesses of a size beyond that of household enterprises.

    Methodology: Regression discontinuity design.

    Sample: 655 male and female current and potential entrepreneurs who have scored into the Technoserve program based on a score of entrepreneurial ability. (Comparison group is those who did not score into the program). Current entrepreneurs have about 10 employees (not household enterprises).

    Findings: Business training significantly increases the probability that an applicant to the workshop starts a business (4-9 percentage points) or expands an existing business (25 to 56 percentage points). Differential impacts of different parts of the program on the start-up of new business and the expansion of existing businesses. Results suggest financial constraints to entrepreneurs are present, and financial constraints for women are greater than for men. The effect of the full training program on business start-up or expansion is larger for male participants.

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  • Asset Ownership and Egalitarian Decision Making in Dual-headed Households in Ecuador

    Deere and Twyman (2012)

    Intervention settings:

    Intervention description: Land titling.

    Methodology: Logit models with 2010 Ecuador Household Asset Survey.

    Sample: 2,892 households (25% women-headed, 68% jointly headed, 7% male-headed).

    Findings: Women's share of couples' wealth was positively and significantly associated with the likelihood of joint decision-making regarding their decision to work and to spend income.

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  • Training or Technical Assistance? A Field Experiment to Learn What Works to Increase Managerial Capital for Female Microenterpreneurs

    Valdivia (2011)

    Original Abstract:

    This study evaluates the impacts of a business training program serving female microentrepreneurs in Lima that have previously benefited with the titling of their urban parcels. The intervention included personal development, business management and productive skills, aiming at empowering women so that they improve the control of their lives, their access to credit, their business practices, which in turn would increase the income and welfare of their families. 1983 eligible women were randomly allocated to treatment (2) and control groups. Women in the two treatment groups (1416) were offered business training in 36 three-hour sessions over approximately 12 weeks (regular training). In addition, half of them were offered an individualized support in the form of technical assistance (TA) over a period of three extra months. A baseline survey was applied before randomization and a follow-up survey about four months after the end of the treatment (about 12 months since the beginning of treatment). We find that women assigned to treatment indeed made some important adjustments in their business practices according to the training, although they differ depending on the type of treatment received. Those that received only regular training were more prone to close losing businesses. In turn, those that also received TA, were more prone to plan and execute innovations, as well as to increase their association with business peers and its use of informal credit sources. Furthermore, such innovations led to an increase in sales of at least 18%. These results have a clear policy implication: transmitting general good business practices may be cheaper and more scalable, but we need to include specific advice to help female microentrepreneurs grow. Both, business income and practices effects accrue among those with relatively larger businesses, suggesting the existence of a threshold above which this kind of business training can help. Lack of strong effects on the participation of women in key decisions and attitudes towards gender relations suggest the need to strengthen the personal development module, but such adjustment needs to take into account that time is a scarce resource for female microentrepreneurs as they need to share their time between their businesses and their traditional responsibilities with household chores.

    Intervention settings: Urban.

    Intervention description: Women in two treatment groups offered business training in 36 three-hour sessions over 12 weeks. Half of them were additionally offered individualized technical assistance over an extra three months. Training covered personal development, business management and productive skills.

    Methodology: RCT.

    Sample: 1,983 female microentrepreurs.

    Findings: Women assigned to treatment made adjustments in business practices according to their training. Those that received only regular training were more prone to close losing businesses. Those that also received TA were more prone to plan and execute innovations and to increase use of business peers and informal credit sources. Innovations led to increase in sales of 18%.

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  • Land Ownership and Farm Management in Ecuador: Egalitarian Family Farming Systems and Gendered Constraints

    Deere and Twyman (2012)

    Intervention settings:

    Intervention description: Land titling.

    Methodology: Logit models with 2010 Ecuador Household Asset Survey .

    Sample: 2,892 households (25% women-headed, 68% jointly headed, 7% male-headed).

    Findings: Joint land ownership, as opposed to individual ownership, was a positive and statistically significant predictor of household decisions about crop cultivation.

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  • Fertility Responses to Land Titling Programs: The Roles of Ownership Security and the Distribution of Household Assets

    Field (2003)

    Original Abstract:

    This paper examines the link between intra-household allocation of ownership rights and fertility using data from a nation-wide titling program in Peru. A stated objective of the program was to improve gender inequality of property ownership by including female names on land titles. I use data from the target population of urban poor to study whether improvements in ownership equality were associated with changes in household decision-making and fertility behavior. I find that women in program regions are 50% more likely to appear as owners on property documents and 30% more likely to participate in household decision-making. My estimates indicate that land titling is also associated with a significant and sharp reduction in annual births among program beneficiaries of 21% in the year prior to the survey, and a 19% reduction in birth rates two years prior to the survey among households titled early in the program. Meanwhile, annual birth rates corresponding to children two years and older exhibit no significant differences according to whether the household resides in an early program neighborhood and is eligible for participation, consistent with the hypothesis that the program is responsible for the trend. In addition to changes in female ownership, three other channels of impact are examined: the effect of titling on household labor force participation, wealth, and tenure-security related demand for children. Instrumental variables estimates provide evidence that increases in female bargaining power are at least partially responsible for the fertility decline associated with titling.

    Intervention settings:

    Intervention description: Land titling.

    Methodology: Difference in differences with 1997 household survey (LSMS).

    Sample: 2,750 female-headed households and 4,433 women.

    Findings: Peru's national land titling program led to a significant increase in the incidence of women's names on property documents and in women's decision-making power within the home. It also led to fertility declines.

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  • Entitled to Work: Urban Property Rights and Labor Supply in Peru

    Field (2007)

    Original Abstract:

    Between 1996 and 2003, the Peruvian government issued property titles to over 1.2 million urban households, the largest titling program targeted at urban squatters in the developing world. This paper examines the labor market effects of increases in tenure security resulting from the program. To isolate the causal role of ownership rights, I make use of differences across regions induced by the timing ofthe program and differences across target populations in level of preprogram ownership rights. My estimates suggest that titling results in a substantial increase in labor hours, a shift in labor supply away from work at home to work in the outside market, and substitution of adult for child labor.

    Intervention settings:

    Intervention description: Land titling.

    Methodology: Intent to treat analysis with OLS and instrumental variable regressions with 1997 and 2000 household surveys (LSMS) with panel features.

    Sample: 2,750 households (24% female-headed).

    Findings: Increasing tenure security from the issuance of property titles to urban households enabled former squatters, especially men, to work more hours in the labor market instead of staying at home to guard their property with a resulting increase in income. Although the effect was positive for women, it was substantially larger for men.

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  • Creating incentives to save among microfinance borrowers: a behavioral experiment from Guatemala

    Atkinson, de Janvry, McIntosh and Sadoulet (2010)

    Original Abstract:

    We report on an experiment in which a new set of commercial savings products, informed by the behavioral finance literature, were offered to the microfinance borrowers of Guatemala's largest public-sector bank. We find that prompting savings at the time of loan repayment leads savings deposits to double relative to the control, and framing a contribution of 10% of the loan payment causes them to double again. Loan repayment and savings accumulation appear to be complementary. Mainstreaming the most successful product tested here would allow the bank to realize savings sufficient to leverage 50% of the short-term loan portfolio.

    Intervention settings: N/A (locations unspecified).

    Intervention description: New commercial savings products, with no financial incentives or penalties, were offered to existing borrowers.

    Methodology: RCT.

    Sample: 1,375 borrowers from 20 microfinance branches of Guatemala's largest public sector bank.

    Findings: Prompting for savings at the time of loan payments doubles savings, while suggesting a savings deposit equal to 10% of the loan repayment causes savings to double again. Women are significantly more likely to take up the offer of a savings account. However, women's accumulated net savings are significantly lower overall.

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  • Improving the Design of Conditional Transfer Programs: Evidence from a Randomized Education Experiment in Colombia

    Barrera-Osorio, Bertrand, Linden and Perez-Calle (2011)

    Original Abstract:

    Using a student level randomization, we compare three education-based conditional cash transfers designs: a standard design, a design where part of the monthly transfers are postponed until children have to re-enroll in school, and a design that lowers the reward for attendance but incentivizes graduation and tertiary enrollment. The two nonstandard designs significantly increase enrollment rates at both the secondary and tertiary levels while delivering the same attendance gains as the standard design. Postponing some of the attendance transfers to the time of re-enrollment appears particularly effective for the most at-risk children.

    Intervention settings: Urban: Bogota

    Intervention description: Comparison of three education-based conditional cash transfers: standard design; postponing part of monthly transfers until students re-enroll in school; and reduced rewards for attendance with incentives to graduate and enroll in a tertiary institution.

    Methodology: RCT

    Sample: 7,569 students in 68 schools.

    Findings: Both non-standard variants increase enrollment rates at the secondary and tertiary levels without reducing attendance.

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  • Schooling Impacts of Conditional Cash Transfers on Young Children: Evidence from Mexico

    Berhman, Parker and Todd (2011)

    Original Abstract:

    This paper evaluates impacts of Oportunidades, a Mexican conditional cash transfer program, on educational outcomes 5.5 years after program initiation for a group of children who were age 0 to 8 years pre-program. The oldest children within this age range received educational scholarships. The youngest children did not receive the scholarships because they had not yet started the third grade of school (the initial grade for scholarships), but were beneficiaries of the program's health components that included nutritional supplements for children 24 months of age or younger. All of these children also may have benefitted more generally from increased household income resulting from the program. This paper investigates how the program differentially affected younger and older children within this age range and examines whether the early nutritional intervention led to improvements in subsequent educational performance. The program impact estimates are derived from a randomly assigned treatment and control group, which participated for different lengths of time in the program, and from a matched comparison group that had not participated prior to the collection of data in 2003. The empirical findings show positive program impacts on reducing ages at entering school for the younger children as well as on accumulated grades of schooling after 5.5 years of benefits for older children, with estimates implying a 1 percent reduction in the age of entry to primary and an increase in grades of schooling completed to date of about 8 to 9 percent.

    Intervention settings: Rural areas in 7 states

    Intervention description: Conditional cash transfers under PROGRESA provided to children in 320 randomly selected communities for 1.5 years, after which they were also provided to children in the 186 control communities.

    Methodology: RCT (with estimates of longer-term exposure obtained using a matched comparison group).

    Sample: 14,485 children aged 9-15 in 1997 (and 12,457 from 15-21 in 2003) from 506 communities.

    Findings: Estimated impact of 1.5 years longer exposure to the program (i.e., 5.5 years versus 4 years) is 2.4% for boys and 2.7% for girls (and 4.4% for boys and 6.8% for girls who had completed 7 or more grades pre-program). Estimates of the impact of 5.5 years of exposure to the program, obtained by using data from a matched comparison group from 152 additional communities, indicate that completed years of schooling increased by 12-15% among boys and 9-10% among girls, depending on the age group.

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