Risk Sharing, Commitment Constraints and Self Help Groups / Orazio Attanasio, Anjini Kochar, Aprajit Mahajan, Vaishnavi Surendra.

Format:

Book

Author/Creator:

Attanasio, Orazio.

Contributor:

National Bureau of Economic Research.

Kochar, Anjini.

Mahajan, Aprajit.

Surendra, Vaishnavi.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31245.

NBER working paper series no. w31245

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

Evaluations of group savings and lending programs have largely focused on average impacts, rather than distributional impacts -- finding modest effects on long-term economic well-being. In this paper, we exploit the randomized roll-out of a self-help group lending program in rural Bihar, India (Hoffmann et al., 2021) to demonstrate that well-functioning groups facilitate risk-sharing within rural communities. We find no impact of the program on risk-sharing, measured as a reduction in the variance of consumption growth, in the aggregate. However, the program significantly improves risk-sharing in regions where it had greater institutional capacity and was better implemented. Building on our theoretical framework, we provide evidence of a specific channel of impact: program quality and pre-existing scale improve the quality and functioning of groups, which in turn increase the insurance value of the program to communities.

Notes:

Print version record

May 2023.