Remittances and the Problem of Control: A Field Experiment Among Migrants from El Salvador

Remittances and the Problem of Control: A Field Experiment Among Migrants from El Salvador

7 July, 2020    

While remittance flows to developing countries are very large, it is unknown whether migrants desire more control over how remittances are used. This research uses a randomized field experiment to investigate the importance of migrant control over the use of remittances. In partnership with a Salvadoran bank, we offered US-based migrants from El Salvador bank accounts in their home country into which they could send remittances. We randomly varied migrant control over El Salvador-based savings by offering different types of accounts across treatment groups. Migrants offered the greatest degree of control over savings accumulated the most savings at the partner bank, compared to others offered less or no control over savings. Effects of this treatment on savings are concentrated among migrants who expressed demand for control over remittances in the baseline survey. We also find positive spillovers of our savings intervention in the form of increased savings at other banks (specifically, banks in the U.S.). We interpret the effects we find as arising from the joint effect of the bank account offers and the marketing pitch made to study participants by our project staff.

Similar Articles
Reciprocity and exclusion in informal financial institutions: An experimental study of rotating savings and credit associations
Group cooperation is fundamental to human society. The public goods game is often used to describe the difficulty of group cooperation. However, th...
How to Help the Poor to Save a Bit: Evidence from a Field Experiment in Kenya
Partnering with a savings product provider in Kenya, we tested the extent to which behavioral interventions and financial incentives can increase t...
Savings and prize-linked savings accounts
Many households have insufficient savings to handle moderate and routine consumption shocks. Many of these financially-fragile households also have...