Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223296
Authors: 
Augsburg, Britta
Caeyers, Bet
Giunti, Sara
Malde, Bansi
Smets, Susanna
Year of Publication: 
2020
Series/Report no.: 
IFS Working Papers No. W20/20
Abstract: 
Making lumpy human capital investments is difficult, particularly since returns may accrue with a significant time lag. Lack of commitment impedes savings and diverts funds from intended investments. We draw on a cluster randomised controlled trial in rural India to provide the first evidence that labelled microcredit is effective in increasing take-up of a lumpy human capital investment, a safe toilet. Testing predictions from a theoretical model provides novel evidence that loan labels influence household borrowing and investment decisions. Not all loans are used for sanitation investments, suggesting that loan labels offer a soft commitment incentive.
JEL: 
O16
D14
G41
I12
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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