Published version of paper now available: “Savings in Transnational Households: A Field Experiment among Migrants from El Salvador”

The final, published version of my paper in the Review of Economics and Statistics has just come out in the May 2015 issue. My co-authors on the paper are Nava Ashraf, Diego Aycinena, and Claudia Martinez A.

We conducted a randomized experiment among migrants from El Salvador in the Washington, DC area, where we studied how we might stimulate savings in El Salvador with newfangled savings products. We found that when we offered migrants savings accounts that they could jointly own with family members in El Salvador, or accounts they could own solely in their own names, migrants saved substantially more in El Salvador. Savings at our partner bank in El Salvador (Banco Agricola) went up by over 250%, compared to the control group. (Complementary survey data suggest this is a true increase in savings, not just a shift from other banks or other forms of savings.)

The big takeaway from the study is that international migrants value the ability to monitor and control how money is used by their remittance recipients (mostly family members) in the home country. In particular, giving migrants more monitoring and control over savings leads them to save more in their home country.

We very much hope these findings influence financial institutions and policy-makers when they design remittance-related products or interventions aimed at raising savings in developing countries. We’ve been particularly pleased that our findings have been embraced at the Inter-American Development Bank (one of our funders), for example in the Remittances and Savings Program of their Multilateral Investment Fund (FOMIN in Spanish).

This work ended up stimulating later work of mine (which ended up being published earlier!) on migrant control over educational spending in their home countries, among migrants from El Salvador and the Philippines. It also ended up motivating a study of mine in urban Mozambique showing that gift-givers care about the composition (and not just the level) of expenditures of gift-recipients.

It’s been a long haul! We conceived of this project in 2006, secured initial funding from the Inter-American Development Bank that year, and started the fieldwork in 2007. With additional funding from the National Science Foundation, the MacArthur Foundation, the University of Michigan, and Harvard, we completed the endline fieldwork in 2009, and tracked savings at the partner bank through 2012. Given how long it took, it’s definitely not the type of project I’d recommend to graduate students or faculty on the tenure track (although I was still an assistant prof when I started it!)…