Speaker
Description
Ensuring financial security for old age is a critical concern for rural smallholder farmers who mainly rely on intergenerational transfers. However, economic and demographic developments affect the intergenerational future transfers and expectations around them with potentially adverse consequences for private savings efforts. This study explores saving preferences of rural smallholder farmers in Ghana within the framework of an intergenerational contract, where children provide financial support for their parents’ old age. Using a lab-in-the-field experiment, we examine how parental savings and child transfers interact. Our findings reveal that high levels of parental savings persist regardless of anticipated child support. Similarly, child transfers remain consistent, uninfluenced by parental savings levels. We also find no evidence of strategic under-saving among parents or a crowding out of private savings by expected future transfers. Consistent with these results, we document shared responsibility of both parents and children for ensuring old-age financial security in an incentivized social norm elicitation.
| Keyword | Financial Inclusion and Microfinance |
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