Directing Remittances to Education with Soft and Hard Commitments: Evidence from a Lab-in-The-Field Experiment and New Product Take-Up Among Filipino Migrants in Rome

26 Pages Posted: 20 Apr 2016

See all articles by Giuseppe De Arcangelis

Giuseppe De Arcangelis

Sapienza Università di Roma

Majlinda Joxhe

University of Rome Tor Vergata

David J. McKenzie

World Bank - Development Research Group (DECRG); IZA Institute of Labor Economics

Erwin R. Tiongson

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS); Institute for the Study of Labor (IZA); University College London - CReAM - Centre for Research and Analysis of Migration; Asian Institute of Management

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; National Bureau of Economic Research (NBER); University of Michigan at Ann Arbor - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2014

Abstract

This paper tests how migrants' willingness to remit changes when given the ability to direct remittances to educational purposes using different forms of commitment. Variants of a dictator game in a lab-in-the-field experiment with Filipino migrants in Rome are used to examine remitting behavior under varying degrees of commitment. These range from the soft commitment of simply labeling remittances as being for education, to the hard commitment of having funds directly paid to a school and the student's educational performance monitored. The analysis finds that the introduction of simple labeling for education raises remittances by more than 15 percent. Adding the ability to directly send this funding to the school adds only a further 2.2 percent. The information asymmetry between migrants and their most closely connected household is randomly varied, but no significant change is found in the remittance response to these forms of commitment as information varies. Behavior in these games is shown to be predictive of take-up of a new financial product called EduPay, designed to allow migrants to pay remittances directly to schools in the Philippines. This take-up seems largely driven by a response to the ability to label remittances for education, rather than to the hard commitment feature of directly paying schools.

Keywords: Remittances, Tertiary Education, Access & Equity in Basic Education, Rural Development Knowledge & Information Systems, Debt Markets

Suggested Citation

De Arcangelis, Giuseppe and Joxhe, Majlinda and McKenzie, David John and Tiongson, Erwin R. and Yang, Dean, Directing Remittances to Education with Soft and Hard Commitments: Evidence from a Lab-in-The-Field Experiment and New Product Take-Up Among Filipino Migrants in Rome (May 1, 2014). World Bank Policy Research Working Paper No. 6896, Available at SSRN: https://ssrn.com/abstract=2444052

Giuseppe De Arcangelis (Contact Author)

Sapienza Università di Roma ( email )

Dipartimento di Scienze Sociali ed Economiche
P.le Aldo Moro 5
Rome, 00185
Italy
+390649910489 (Phone)

HOME PAGE: http://https://sites.google.com/a/uniroma1.it?pli=1

Majlinda Joxhe

University of Rome Tor Vergata ( email )

Via di Tor Vergata
Rome, Lazio 00133
Italy

David John McKenzie

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Erwin R. Tiongson

Georgetown University - Edmund A. Walsh School of Foreign Service (SFS) ( email )

Washington, DC 20057
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

University College London - CReAM - Centre for Research and Analysis of Migration ( email )

Drayton House
30 Gordon Street
London, WC1H 0AX
United Kingdom

Asian Institute of Management ( email )

123 Paseo de Roxas
Makati, 1260
Philippines

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

440 Lorch Hall
611 Tappan Street
Ann Arbor, MI 48109
United States
734-764-6158 (Phone)

HOME PAGE: http://www.umich.edu/~deanyang/

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
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University of Michigan at Ann Arbor - Department of Economics

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Ann Arbor, MI 48109-1220
United States

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