Pay Me Later: How the Timing of Wage Payments Impacts Worker Financial Health

A new IPA study from Malawi finds that allowing workers to defer receiving part of their wages significantly increases savings. Working with a large agricultural employer, researchers Lasse Brune, Jason Kerwin, and Eric Chyn find that deferred wage payments may help address self-control issues that could normally inhibit savings. A growing body of evidence suggests that changing the timing (smaller, more frequent payments versus larger, spread-out payments), and disbursement method of wage payments, has important impacts on financial health. Deferred wages may be an effective savings device for some, while others may require more frequent smaller payments to manage consumption needs. Moreover, digital payments allow employers to automate savings and make other customizations, at low or no cost to employers, and with potentially large benefits to the employees.

This webinar also explores: how does the evidence on digital wage payments informs the broader discussion on designing effective digital cash transfers?