How Much Does Having a Bank Account Help the Poor?
Forthcoming: Journal of Development Studies
43 Pages Posted: 12 Jan 2016 Last revised: 31 Aug 2017
Date Written: June 12, 2017
Abstract
Having a bank account is widely regarded as the first step toward financial inclusion of the poor. Funds deposited in bank account are also observed to lead to higher savings. Exploiting special features of National Rural Employment Guarantee Scheme (NREGS) of India, our estimates indicate that households that receive NREGS wages through bank do not appear to spend more on education than other comparable households that receive cash payment. The district level intention to treat specification produces similar results. The findings suggest that the rural poor face constraints in accessing their bank accounts due to financial illiteracy and other problems.
Keywords: Bank account, education, household expenditure, cash pay, NREGA, Direct benefit transfer.
JEL Classification: D10, D14, I20, I380, O150
Suggested Citation: Suggested Citation