Co-sponsored by the New America Foundation and Innovations for Poverty Action
In their acclaimed new book, More than Good Intentions, Yale economist Dean Karlan and Jacob Appel show how small changes in development initiatives can drastically improve the well-being of the poor. As behavioral economists have shown, people are faced with psychological barriers that can lead to irrational choices and prevent certain positive behaviors from forming. In the literature on financial capability, the behavioral challenges to altering and establishing savings habits are too often understated or at times neglected altogether. On June 27th, the New America Foundation and Innovations for Poverty Action (IPA) co-hosted an event to discuss financial capability, the book - More than Good Intentions, as well as release a new report by the Global Assets Project called "Accelerating Financial Capability Among Youth: Nudging New Thinking."
Are savings accounts a viable tool to spur development and financial inclusion for one of the world’s most vulnerable populations, low-income youth? In May 2010, Save the Children, the Center for Social Development (CSD) at Washington University in St Louis, the New America Foundation, and the Consultative Group to Assist the Poor (CGAP) launched the YouthSave Project in order to explore this very question. One year later, on June 7th, 2011, Consortium members gathered at the New America Foundation to share their experiences from their first year of fieldwork, research and analysis.
By Payal Pathak, New America Foundation
This month, the YouthSave Consortium, Expert Advisory Board (EAB) and partnering Financial Institution (FI) representatives from Project countries came together in Bogota, Colombia for a two-day learning exchange. The objectives of this meeting were two-fold: 1) to share YouthSave project progress and updates with our partners and EAB members and 2) to exchange lessons and engage our stakeholders on topics that can improve YouthSave’s efforts in developing, delivering and testing youth savings products targeted at low-income youth.
The Youth Development and Financial Inclusion Nexus?
Of the 3 billion people today that are under the age of twenty-five, half a billion live on less than $2 a day and less than 10% have access to financial services. Low income youth - one of the world's largest and most vulnerable populations - need new and effective tools to achieve social and economic development. This half-day forum – hosted by the YouthSave Consortium with the support of The MasterCard Foundation– explored whether savings accounts for low-income youth might be one such tool. YouthSave also released its new report, “Youth Savings in Developing Countries: Trends in Practice, Gaps in Knowledge,” at the event.