Creating a Cell Phone-Based Defined Contribution Account

Researchers Michael Callen, Joshua Blumenstock and Tarek Ghani build on an earlier CFSP project to implement a randomized field experiment in Afghanistan to test the effects of mobile phone-based defined contribution accounts ("M-Pasandaaz") on savings outcomes in a private firm with approximately 1,200 employees.  This study explores the extent to which a mobile phone-based defined contribution account can improve the financial capabilities and welfare outcomes for these employees.

Research Questions: 
  • Can a salary-linked savings product create an enduring increase in savings, even in a highly uncertain environment?
  • What explanation for why Afghans have low levels of formal savings is most accurate in the data: present-biased preferences; aversion to complex decisions; distrust of formal banks; or liquidity constraints?
  • Which constraints can a defined contribution product solve?
  • How does an individual's default enrollment status impact rates of participation and accumulated savings?
  • How can defined contribution accounts be best designed to encourage contributions?
Data Notes: 

Survey Timeframe:

  • Beginning September 2013

Survey Size:

  • 1,200 workers across seven Afghan provinces


  • Employees of a large private Afghan firm


  • Face-to-face surveys
  • Phone surveys


  • The sample is randomized into three treatment arms: 400 will participate in a flexible salary-linked account; 400 will participate in a commitment salary-linked account; and 400 who must opt-out.