Educational Expenditure Suppression Effect
RCTClinical Trial
Interventions providing soft preference labels to senders may inadvertently suppress spending in targeted human capital investment categories back home due to complex intra-household budget reallocations.
Picture this
Think of giving a student a voucher earmarked for textbooks; because the family now sees messages guiding money across various specified needs, they alter their overall budget and unexpectedly reduce their cash spending on school tuition to cover other immediate household costs.
What the evidence says
Access to remittance labeling produced a statistically significant negative effect on household educational expenditures (-0.432 log points, p < 0.05 in full sample; -0.448 log points, p < 0.10 in above-median baseline remittance subsample).
- Who was studied
- 1,377 paired migrant and recipient household survey responses in the Philippines.
- How
- OLS intent-to-treat regression evaluating 3-month log expenditure categories across full sample and baseline remittance subsamples.
What to do
Investigate intra-household crowd-out mechanisms prior to introducing soft remittance labels to prevent accidental reductions in 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