Assessing the Demand for Micropensions among India's Poor.

Abstract

Using new data from a field experiment in India, we test hypotheses about micropension design in a poor population. We elicit demand for the basic micropension in addition to variants with different minimum withdrawal ages, government match rates, and options for lump sum withdrawal. A majority (80%) of respondents report interest in the micropension, and the amount they are willing to contribute would be enough to cover about 40% of expected old-age consumption. We find that prospective policyholders value the inability to access the assets until a particular age. We also find that they respond positively to the government match rate.