Remittance Labeling Education Spending Reduction
RCTClinical Trial
Policymakers often expect soft remittance labeling to boost household human capital investments like education, but labeling might unintentionally crowd out spending in key categories.
Picture this
When a sender attaches soft labels for basic survival needs like food or utilities, the receiving family may shift its limited non-remittance income away from flexible long-term investments like tuition fees to pay for immediate tagged expenses, similar to spending allowance on tagged grocery coupons while cutting back on school supplies.
What the evidence says
Remittance labeling caused a statistically significant reduction in log household educational expenditures of -0.432 log points across the full sample (p < 0.05) and -0.448 log points in the above-median baseline remittance subsample (p < 0.10).
- Who was studied
- N = 2,075 target recipient households in the Philippines paired with 1,377 overseas migrant workers in the UAE.
- How
- 30-week RCT measuring log household educational expenditure over a 3-month recall period at endline.
What to do
Combine remittance labeling with dedicated direct tuition disbursement mechanisms rather than soft messaging when attempting to promote educational spending.
From the source
"There is a scattering of effects on other specific expenditure items, including (surprisingly) negative impacts on educational expenditures. We can propose no obvious reason why the treatment may have reduced educational expenditures."
A Field Experiment among Filipino Migrant Workers in the UAE.pdf