Sankar De
former Professor, Shiv Nadar University
Abstract:
A bank account is widely regarded as the first step toward financial inclusion of the poor. Among other benefits, funds deposited in a bank account are observed to lead to higher savings. However, the existing literature does not investigate whether the savings are productively used. Using nationally representative samples, to ensure generalizability of our findings, and exploiting special features of National Rural Employment Guarantee Scheme (NREGS) of India, our empirical tests consistently indicate that households that receive NREGS wages through bank spend significantly less on education than other comparable households that receive cash payment. The findings suggest that the poor face constraints in accessing their bank accounts regularly. Further, such constraints affect discretionary expenses, including educational expenses which are discretionary for the very poor, more than essential expenses such as food expenses. Additional tests for other discretionary and non-discretionary expenses provide corroborating evidence. The results are consistent between standard OLS and instrumental variable regressions designed to correct for omitted variable bias.
Date: March 31, 2016
Time: 04:30 P.M.
Venue:
Conference Hall, Ground Floor, R&T Building
National Institute of Public Finance and Policy,
18/2 Satsang Vihar Marg, Special Institutional Area,
New Delhi-110067(INDIA)
Location:
View Larger Map
Note:
Those who are interested may please confirm your participation to Mr. Bins Sebastian at bins.sebastian@nipfp.org.in latest by Wednesday, 30th March 2016
former Professor, Shiv Nadar University
Abstract:
A bank account is widely regarded as the first step toward financial inclusion of the poor. Among other benefits, funds deposited in a bank account are observed to lead to higher savings. However, the existing literature does not investigate whether the savings are productively used. Using nationally representative samples, to ensure generalizability of our findings, and exploiting special features of National Rural Employment Guarantee Scheme (NREGS) of India, our empirical tests consistently indicate that households that receive NREGS wages through bank spend significantly less on education than other comparable households that receive cash payment. The findings suggest that the poor face constraints in accessing their bank accounts regularly. Further, such constraints affect discretionary expenses, including educational expenses which are discretionary for the very poor, more than essential expenses such as food expenses. Additional tests for other discretionary and non-discretionary expenses provide corroborating evidence. The results are consistent between standard OLS and instrumental variable regressions designed to correct for omitted variable bias.
Date: March 31, 2016
Time: 04:30 P.M.
Venue:
Conference Hall, Ground Floor, R&T Building
National Institute of Public Finance and Policy,
18/2 Satsang Vihar Marg, Special Institutional Area,
New Delhi-110067(INDIA)
Location:
View Larger Map
Note:
Those who are interested may please confirm your participation to Mr. Bins Sebastian at bins.sebastian@nipfp.org.in latest by Wednesday, 30th March 2016
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