This article presents results from a field experiment which studied low-income residents’ preferences for cash and CPF.

Our results suggest that the preferences of low-income residents regarding cash and CPF are very heterogeneous. Nearly half of our sample of low-income residents (48 per cent) expressed a strong preference to have part of their incomes saved in CPF accounts, citing the need to commit themselves to save for their future needs.

On the other hand, a minority (14 per cent) valued the liquidity that cash offers, and expressed preference for job packages that paid exclusively cash.

Our results suggest that the current system of paying some of workers' incomes into CPF is suitable for most low-income residents.

The views expressed in this paper are solely those of the authors and do not necessarily reflect those of the Ministry of Trade and Industry, the Ministry of Manpower or the Government of Singapore.

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