Testimonies
Testimonio de María José Romano Boscarino, Directora General de Estrategias Educativas, Ministerio de Educación de la Ciudad de Buenos Aires.
Reminders to save for retirement in Colombia
The tendency to not follow through with virtuous intentions is ubiquitous. One reason why people fail to achieve their objectives may be due to a lack of attention and their likelihood of forgetting. A puzzle that economists have been struggling to solve is understanding why people do not manage to use easily available technologies such as self-set reminders to improve their time and resource management. In this project we conduct an experiment in collaboration with a public retirement scheme in Colombia (Colpensiones) that provides a matched voluntary savings account (20%) for low income individuals. In addition, they systematically conduct reminders campaigns and incentive schemes to increase savings. The experiment will allow us to estimate the effect of reminders on savings behavior, quantify the value that people attribute to automatized and personalized reminders to save, and determine whether people are sophisticated in appreciating the value or reminders or rather under-estimate their efficacy. Answering these questions is important because reminders can help public agencies such as Colpensiones by encouraging saving among some beneficiaries.
But at the same time reminders are expensive to distribute and may be perceived as excessive nuisance from
some, so identifying the savers for which they work has broad implications for welfare and costs to the agency. Assessing the degree of sophistication about the value of reminders in the population of BEPS clients is essential in order to understand how paternalistic Colpensiones should be with respect to reminders for clients and guide welfare improving policy design.
In this experiment, to uncover the degree of sophistication around the value of reminders, we will (a) vary the availability of reminders to estimate the effect of reminders on saving behavior, (b) vary whether people can choose to receive reminders to study whether saving rates are comparable to the scenario where everyone is defaulted into receiving reminders, (c) vary the cost of reminders to identify the value placed on reminders, and (d) vary the value of reminders (by varying the number of lottery tickets for the house) to study whether the demand for reminders responds proportionally to the benefit of saving.
Vocational training in Buenos Aires
High levels of unemployment, informality, and a lack of skills are a key limitation of growth in developing countries and have revived interest of policy makers in vocational education. Vocational training programs (VT hereafter) are often seen as a means to reduce skills depreciation and improve labor market outcomes and formality, particularly for low-skilled workers. By reallocating workers to the formal sector, where firms tend to offer higher pay and allow workers improved professional opportunities, vocational training can improve growth and reduce inequality. This is particularly important for improving intergenerational mobility in Latin America, one of the most unequal regions in the world (World Bank, 2005), where income plays a large role on childhood cognitive development and long-term socioeconomic inequality (Schady et al. 2015). Yet evidence on the impacts of VT programs is mixed (Mckenzie, 2017) and there is a broad view that those who need training the most tend to train the least (OECD, 2019).
Vocational training programs in Argentina are offered free of charge from the public sector, are oversubscribed and have low graduation rates. These three factors suggest that the programs are not offered to the people
who can benefit the most. Our project seeks to first understand how economic preferences, psychological traits, and expectations about the economic costs and benefits of vocational training predict student achievement in the program. In doing so, we conduct a survey-based information experiment with prospective students that varies the price of effort needed to succeed in the program or program specific employment projections. Combined with administrative records from participating schools, we will test the hypothesis that better-informed participants are less likely to drop out condition on enrollment.
Moving forward, we will use these insights to conduct a field experiment with students to identify two key aspects in the of human capital production- academic efficiency and value of time - to shed light on how they may contribute to gaps in human capital accumulation in adulthood. We will then leverage these lessons to design a modular coaching program that teaches students the non-technical skills that are important for achievement, in a context where many are time constrained due to work and household obligations.