Who You Train Matters: Identifying Complementary Effects of Financial Education on Migrant Households

This paper provides experimental evidence on whether financial literacy programs work to improve financial knowledge and financial management, and thereby increase savings in migrants households. It examines whether such programs are best delivered to the migrant worker, to someone in their household, or to both. The paper presents findings from a randomized experiment in Indonesia, which allocated migrants and their families to a control group, a migrant-only training group, a family member-only training group, and a training group in which both the migrant and a family member were trained. Findings include:

• Impact is greater when both the migrant and their family member are trained, leading to better financial planning and budgeting, and to more saving;
• Training the family member alone has some positive but smaller effects, and training only the migrant leads to no impacts on the remaining family members;
• Training results in no increase in the amount or frequency of remittances.

The study concludes that financial education can have large effects when provided at a teachable moment, but this impact varies greatly with who receives training.