Renuka Sane, Susan Thomas
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This paper examines who contributes and who
persists in contributing in a national,
voluntary, defined contributory pension pro
gram, where the government provides the
incentive of matching contributions of a minimum
amount (USD 16). The paper uses proprietary data
from a financial services firm where 12 percent
of customers (37000 individuals) chose to
participate in this program. The evidence shows
that only about 50 percent of contributors reach
the minimum amount for the co-contribution, but
that participants persist in contributing even
if they failed to contribute the minimum amount
in a given year. While this paper does not
provide causal estimates, it does present
evidence of considerable interest among the
informal sector in a state-run voluntary pension
program in an emerging market where access to
formal finance is otherwise poor. |