Asymmetric Migrant-Recipient Preference Divergence
RCTClinical Trial
Transnational families face a principal-agent conflict where overseas senders prioritize long-term capital investments or savings while home recipient households favor immediate consumption.
Picture this
Senders living abroad and recipient families at home evaluate financial needs through different lenses, like a remote sponsor wanting money spent on building repairs while the resident family uses cash for everyday groceries and bills.
What the evidence says
40% of migrant senders expressed a desire for more control over how recipient households use remittances, and 56% report instructing recipients on fund usage; however, labeling resulted in a statistically non-significant change of -0.200 log points in expenditure on migrants' priority items.
- Who was studied
- N = 4,458 retained migrant workers in UAE and 2,075 paired recipient households in the Philippines.
- How
- RCT baseline survey measuring migrant-designated priority expenditure items against endline household expenditure outcomes.
What to do
Implement structural financial constraints or targeted vouchers rather than voluntary communication signals when addressing principal-agent misalignment in transnational families.
From the source
"A key barrier to maximizing the development potential of remittances is that migrants who are sending these funds have limited ability to monitor or control how they are used by beneficiaries. Migrants' preferences on how remittances should be spent often differ from the beneficiaries' preferences."
A Field Experiment among Filipino Migrant Workers in the UAE.pdf