Female Empowerment: Impact of a Commitment Savings Product in the Philippines

device itself (e.g., Benartzi and Thaler (2004) and Ashraf, Karlan and Yin (2006)).⁵ We find that
increases in institutional savings resulting from the commitment product offering do not crowd
out other savings in the household, regardless of who controls the other asset. Thus, the savings
put into the commitment product did not appear to reduce the savings controlled by other
household members: rather, it was likely a result of an overall reduction in and shifting of
consumption in the household.

This paper proceeds as follows. Section II describes the commitment savings product and
the experimental design. Section III presents the empirical results on household decision making
and self-perception of savings behavior. Section IV presents the empirical results on crowd-out
of other savings in order to examine whether the increase was a shift from other member’s
savings. Section V concludes.

II. Intervention and Experimental Design

The SEED Account

We designed and implemented a commitment savings product called a SEED (Save, Earn,
Enjoy Deposits) account with the Green Bank of Caraga, a small rural bank in Mindanao,
Philippines. The SEED account requires that clients commit not to withdraw funds that are in the
account until they reach a goal date or amount but does not explicitly commit the client to deposit
funds after opening the account. The SEED accounts are individual accounts, even if the
participants were married. There are three critical design features to the account, one regarding
withdrawals and two regarding deposits. First, individuals restricted their rights to withdraw
funds until they reached a specific goal. Clients could restrict withdrawals until a specified

⁵ The latter study shows that institutional savings increase in response to a randomized offering of a
commitment savings account. However, neither study is able to assess whether savings increases are
accompanied by contemporaneous crowd-out of savings held in physical assets, savings at other formal or
informal institutions, or accompanied by negative savings as represented by increased debt. Similar crowd-
out questions remain unanswered in other interventions which increase savings held in specific accounts
(Duflo, Gale, Liebman, Orszag and Saez 2006).

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