The Persistent Effects of Youth Savings Reminders: Experimental Evidence from Text-Message Campaigns in Colombia.

Abstract

We report on a nationwide field experiment with a commercial bank in Colombia in which low-income youth (12 years old on average) who open new accounts are randomly assigned immediately after opening the account to control or to receive one of three twelve-month text-messaging campaigns: i) monthly savings reminders, ii) semimonthly reminders, iii) monthly action-oriented financial education messages. Relative to control, monthly and semimonthly reminders groups increase account balances during the campaign as a result of reduced withdrawals, potentially through savings shifts from home to bank accounts. After the campaign youth in both reminders groups continue to use the accounts but do not deplete balances. The financial education campaign had a smaller, not statistically significant, effect on account balances, but some short-term effect on reducing withdrawals, possibly through shifts from home savings.