Social Interactions and Socio-economic Outcomes: Evidence from Savings

Abstract

Using data from a recent field experiment in Uganda, I use a fixed-effects model to estimate the effects of financial inclusion on the evolution of social interactions among its members. The results in my thesis indicate that social interactions increases among all members in a savings group, in particular there is a significant increase among non-vulnerable participants. The results also suggest strong presence of social benefits among some participants as a result of membership in informal savings and lending groups. Since higher social trust facilitates efficient economic exchanges, my findings suggest that informal savings groups have potential to build economically valuable social capital.