We report on a field experiment using several methods for collecting deposits made in formal bank accounts in rural areas in Sri Lanka. We find that only frequent, face-to-face collection increases aggregate household savings. Collection involving community lock boxes increases balances at the collecting bank, but not overall household savings. Only community box collection appears to have the possibility of being financially viable. The various collection methods allow us to unbundle the role of frequency, salience and habit formation in deposit decisions. We find that frequency and salience affect the number of transactions, but not the level of savings.

Wage subsidies have long been used by Governments as part of their active labor market policies to generate employment for the disadvantaged or to sustain employment during downturns. The current global financial crisis has seen such policies return to prominence, with many developed nations using such policies to try and reduce lay-offs. Nicholas Kaldor (1936), P. Richard Layard and Stephen Nickell (1980), and Lawrence Katz (1998) lay out the economic arguments for such a policy, and discuss conditions under which a short-term subsidy might have longer-term effects on employment for the targeted individuals.