Poverty and Migration in the Digital Age: Experimental Evidence on Mobile Banking in Bangladesh

Last registered on October 27, 2023

Pre-Trial

Trial Information

General Information

Title
Poverty and Migration in the Digital Age: Experimental Evidence on Mobile Banking in Bangladesh
RCT ID
AEARCTR-0003149
Initial registration date
July 11, 2018

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
July 19, 2018, 9:10 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
October 27, 2023, 5:46 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Region

Primary Investigator

Affiliation
National University of Singapore

Other Primary Investigator(s)

PI Affiliation
New York University, Robert F. Wagner Graduate School of Public Service
PI Affiliation
New York University, Robert F. Wagner Graduate School of Public Service
PI Affiliation
Millennium Challenge Corporation
PI Affiliation
World Bank
PI Affiliation
University of Exeter

Additional Trial Information

Status
Completed
Start date
2014-09-01
End date
2016-06-30
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Mobile banking technology makes it cheaper and easier to move money across distances. Against a background of rapid urbanization in Bangladesh, we estimate the impact of mobile banking in a sample of "ultra-poor" rural households paired to relatives who migrated to find jobs in the capital. The study shows that diffusion of the gains from urbanization is constrained by barriers to remitting money. The technology substantially improved rural economic conditions by better connecting villagers to urban migrants, an idea that contrasts with (and complements) innovations like microfinance that focus on rural self-employment. Participants were trained on how to sign up for and use mobile banking accounts in a randomized encouragement design costing less than $12 per family. Active use of accounts increased substantially, from 22% in the rural control group to 70% in the rural treatment group, and urban-to-rural remittances increased by 30% one year later (relative to the control group). For active users, rural consumption increased by 7.5% and extreme poverty fell. Rural households borrowed less, saved and invested more, and fared better in the lean season. The rate of child labor fell, and we find weak but positive evidence that schooling improved. Rural health indicators were unchanged. Migrants, however, bore costs. They were slightly more likely to be in garment work, saved more, and were less likely to be poor. However, migrants actively using mobile banking reported worse physical and emotional health.
External Link(s)

Registration Citation

Citation
Lee, Jean et al. 2023. "Poverty and Migration in the Digital Age: Experimental Evidence on Mobile Banking in Bangladesh." AEA RCT Registry. October 27. https://doi.org/10.1257/rct.3149-2.0
Former Citation
Lee, Jean et al. 2023. "Poverty and Migration in the Digital Age: Experimental Evidence on Mobile Banking in Bangladesh." AEA RCT Registry. October 27. https://www.socialscienceregistry.org/trials/3149/history/198381
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
We provided a randomly-assigned treatment group in Bangladesh with training on bKash mobile financial services and facilitated account set-up if needed. The intervention consisted of a 30 to 45 minute training about how to sign up for and use the bKash service. This training was supplemented with basic technical assistance with enrollment in the bKash service. If requested, our field staff assisted with gathering the necessary documentation for signing up for bKash and completing the application form. A key reason that the intervention had a high potential impact is that mobile banking services in Bangladesh use Unstructured Supplementary Service Data (USSD) menus. The USSD menus allow mobile banking services to be used on any mobile device. The menus, however, are in English, creating a large hurdle for poorer villagers in Gaibandha with only basic levels of numeracy and literacy even in Bangla (Bengali). The intervention was designed to overcome the hurdle. It included teaching the basic steps and protocols of bKash use, together with practical, hands-on experience sending transfers at least five times to establish a degree of comfort. The training materials were based on marketing materials provided by bKash, simpli ed to increase accessibility. Since the phone menus are in English, we also provided menus translated into Bangla (Bengali).
Intervention Start Date
2015-04-01
Intervention End Date
2015-05-31

Primary Outcomes

Primary Outcomes (end points)
Remittances, consumption, poverty, borrowing, savings, self-employment, out-migration, child labor, education of children, physical and emotional health.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experiment took the form of a dual-site design. The two connected sites are: (1) Gaibandha district in Rangpur Division in northwest Bangladesh and (2) Dhaka Division, the administrative unit in which the capital is located. We followed migrants in Dhaka and their families in rural Gaibandha. Across urban migrant - rural household pairs, pairs were randomized into treatment and control.
Experimental Design Details
Randomization Method
Randomization done in office by a computer.
Randomization Unit
Individual-level randomization (urban migrant - rural household pair).
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
815 urban migrant - rural household pairs.
Sample size: planned number of observations
815 urban migrant - rural household pairs.
Sample size (or number of clusters) by treatment arms
413 urban migrant - rural household pairs in the treatment group, 402 urban migrant - rural household pairs in the control group.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
New York University
IRB Approval Date
2014-07-31
IRB Approval Number
14-10097
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
Yes

Program Files

Program Files
Yes
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
Rapid urbanization is reshaping economies and intensifying spatial inequalities. In Bangladesh, we experimentally introduced mobile banking to very poor rural households and family members who had migrated to the city, testing whether mobile technology can reduce inequality by modernizing traditional ways to transfer money. One year later, for active mobile banking users, urban-to-rural remittances increased by 26 percent of the baseline mean. Rural consumption increased by 7.5 percent, and extreme poverty fell. Rural households borrowed less, saved more, sent additional migrants, and consumed more in the lean season. Urban migrants experienced less poverty and saved more but bore costs, reporting worse health.
Citation
Lee, Jean N., Jonathan Morduch, Saravana Ravindran, Abu Shonchoy, and Hassan Zaman. 2021. "Poverty and Migration in the Digital Age: Experimental Evidence on Mobile Banking in Bangladesh." American Economic Journal: Applied Economics, 13 (1): 38-71.

Reports & Other Materials