The Real Effect of Electronic Wage Payments: An Experiment with Salaried Factory Workers in Bangladesh

Researchers have partnered with two garment factories, a local bank, and a mobile payments provider to study whether employers can assist workers in building basic financial capability by offering electronic wage payments. To investigate this question, researchers are conducting a randomized controlled trial in which they introduce i) electronic wage payments through conventional bank accounts and ii) electronic wage payments through a mobile payment platform among a population of salaried factory workers who were previously paid in cash. In the main experiment, researchers test the effects of electronic wage payments on workers’ financial decisions and capabilities. In addition, they plan to conduct a proof of concept experiment for a new financial product designed to help workers smooth their consumption throughout the month. Researchers aim to evaluate whether electronic wage payments and consumption smoothing products translate into improved worker attendance and productivity, either through induced savings, improved ability to cope with income shocks, or changes in borrowing behavior.