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Description:
We study whether savings nudges have the unintended consequence of additional borrowing in high-interest credit. We use data from a pre-registered experiment that encouraged 3.1 million bank customers to save via SMS messages and train a machine learning algorithm to predict individual-level treatment effects. We then focus on individuals who are predicted to save most in response to the intervention and hold credit card debt. We find that these individuals save 5.7% more (61.84 USD per month) but do not change their borrowing: for every additional dollar saved, we can rule out increases of more than two cents in interest expenses