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Field
Abstract
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Before
We compare the impact of financial education with that of access to financial services and products and measure the complementarities between the two. Another aim of this research is to study the interaction between a financial education program and provision of access to financial services (savings and credit). The study population comprises of transnational households in Philippines. To establish a causal effect, our study uses random assignment of the workers and their families to a financial education session and access to financial services. The outcomes of interest are variables related to long-term financial security of transnational households where the migrant workers are females. These include formal saving, remittance expenditures, borrowings, wages and entrepreneurial activities.
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After
The potential of international migration to provide immediate and large income gains to migrant households have generated interest in programs that can enhance its development impacts. We compare the impact of financial education with that of access to financial services and products, and measure complementarities between the two programs. The study population comprises of households in Cabanatuan, Philippines with a family member abroad. To establish a causal effect, we use random assignment of households to financial education sessions or access to financial services or both. The outcomes of interest are variables related to long-term financial security of transnational households where the migrant workers are mostly female. These include formal saving, remittance expenditures, borrowings, wages and entrepreneurial activities.
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Field
Experimental Design (Public)
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Before
The IPA survey team will administer a baseline survey to consenting migrant households upon locating them using the contact information provided by OWWA or through the door-to-door campaign. Migrants at this point will most likely be already abroad. We interview the household head among remaining household members.
The study sample will then be randomly subdivided into different treatment conditions on-site. Household heads will be asked to open a sealed envelope, which will assign them to a treatment group. First, households will be randomized into either a financial education treatment, or into a group that receives no financial education at all. Second, households will be independently cross-randomized into being offered access to formal credit and savings products, or into a group that is not offered financial access. This will generate four treatment conditions with 450 households in each.
Treatment 0 (control group): This is the control condition: No offer of financial education program and/or financial services. The sealed envelope will merely contain a “thank you” letter for participating in the baseline survey.
Treatment 1: Invitation to attend a financial education program: The household head will be invited to attend a short workshop on financial education in ASKI’s training center. The workshop will be free and will be scheduled on a Saturday. It will last 6-8 hours and will be completed in one day. The letter in the sealed envelope will provide details and will ask the household head to indicate interest in the program. OWWA will also provide a letter endorsing participation in the financial education program, which we expect to raise take-up.
For the subsample of transnational households who have a migrant in Singapore or Hong Kong, we take advantage of ASKI’s presence in these countries to further invite respective migrants who belong to households in this treatment group to a workshop in ASKI’s overseas office. The session will be similar to that offered to their household in the Philippines. Hence for this subsample, both the migrant and a remaining household member will be offered training while only the remaining household member will be invited for training for the rest. The mini-experiment is designed to detect the effect of training both the migrant worker and their household, which may be different from the effect of just delivering the financial literacy program to remaining household members.
Treatment 2: Access to financial services and products: This treatment group will only be provided access to financial services and products and will not be offered any form of financial literacy training. In particular, their letter would contain an invitation to open a BPI savings account, would specify requirements, and would indicate nearby branch offices and BPI representatives from whom they can obtain assistance. It would also indicate information on how they could avail of remittance products for their migrant abroad. In addition, the migrant family would also be invited to avail of ASKI’s microloan products for small enterprise development. The letter would contain marketing materials on how they may avail of such products and specify loan officers whom they can contact.
We do not market these products for the migrants who are already abroad.
Treatment 3: Invitation to a financial education program and access to BPI Financial services and ASKI microloan facilities: This treatment group will be invited to attend both a financial education workshop and given access to financial services offered by BPI and ASKI, as in households in treatment groups 1 and 2.
The offer to attend a financial education program and to avail of financial products constitutes an encouragement design, since in practice we cannot prevent migrants and households from accessing these services independently. That said, past research (Ashraf, Aycinena, Martinez & Yang 2011) shows that mere offers and assistance with opening bank accounts lead to large differences in bank account usage in transnational households. Doi, McKenzie, and Zia (2012) find that attendance rates for financial literacy training in Indonesia have a high take-up rate when offered for free and done in coordination with accredited recruitment agencies, even when the training is done separately for migrant workers and family members. Their experiment involved assigning migrants to a migrant-only training group, a family member-only training group, and a joint training group. The take-up rates were 81.2 percent, 76.5 percent, and 65 percent respectively. We expect our offers to be similarly effective, as the government endorses it.
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After
The IPA survey team will administer a baseline survey to consenting migrant households upon locating them using the contact information provided by OWWA or through the door-to-door campaign. Migrants at this point will most likely be already abroad. We interview the household head among remaining household members.
The study sample will then be randomly subdivided into different treatment conditions on-site. First, households will be randomized into either a financial education treatment, or into a group that receives no financial education at all. Second, households will be independently cross-randomized into being offered access to formal credit, insurance, and savings products, or into a group that is not offered financial access. This will generate four treatment conditions with 450 households in each. The chart below maps the four groups:
Treatment 0 (control group): This is the control condition: No offer of financial education program and/or financial services. The sealed envelope will merely contain a “thank you” letter for participating in the baseline survey.
Treatment 1: Invitation to attend a financial education program: The household head will be invited to attend a short workshop on financial education in ASKI’s training center. The workshop will be free and will be scheduled on a Saturday. It will last 6-8 hours and will be completed in one day. To facilitate take-up, the household head will be allowed to bring a companion. A letter will provide details and will ask the household head to indicate interest in the program. OWWA will also provide a letter endorsing participation in the financial education program, which we expect to raise take-up.
Treatment 2: Access to financial services and products: This treatment group will only be provided access to financial services and products and will not be offered any form of financial literacy training. In particular, they will be invited to avail of 4 different products:
1. A BPI Savings Account – a regular savings account with low required maintaining balance, which can be used to receive remittances from migrant members abroad.
2. ASKI microloan – a small loan for enterprise development.
3. ASKI micro-insurance - accident or property insurance. Accident insurance covers losses caused by accidental death or bodily injury due to accident occurring in any place in the world. Property insurance covers property damage resulting from a peril.
Households in this treatment group will be provided with a letter that specifies requirements, and would indicate instructions from where and how they can avail of the products in addition to specifying a contact person to talk to. In addition, the surveyors will offer households immediate registration for a ASKI micro-insurance product, should they wish to register on the spot.
Treatment 3: Invitation to a financial education program and access to BPI Financial services and ASKI microloan facilities: This treatment group will be invited to attend both a financial education workshop and given access to financial services offered by BPI and ASKI, as in households in treatment groups 1 and 2.
The offer to attend a financial education program and to avail of financial products constitutes an encouragement design, since in practice we cannot prevent migrants and households from accessing these services independently. That said, past research (Ashraf, Aycinena, Martinez & Yang 2011) shows that mere offers and assistance with opening bank accounts lead to large differences in bank account usage in transnational households. Doi, McKenzie, and Zia (2012) find that attendance rates for financial literacy training in Indonesia have a high take-up rate when offered for free and done in coordination with accredited recruitment agencies, even when the training is done separately for migrant workers and family members. Their experiment involved assigning migrants to a migrant-only training group, a family member-only training group, and a joint training group. The take-up rates were 81.2 percent, 76.5 percent, and 65 percent respectively. We expect our offers to be similarly effective, as the government endorses it.
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