Does financial education impact savings?

Evaluating the effect of peer-based financial education on savings and financial decision making among foreign domestic workers in Singapore

Speaker: Dr Rashmi Barua, Assistant Professor, Department of Economics, Singapore Management University
Date
: April 12, 2013

Savings, borrowing, and remittance decisions can have serious consequences for individual and social well-being, but involve abstract trade-offs over time and an understanding of risks and probabilities. In case of migrant workers, there is an additional information gap as the migrant and remittance recipient is geographically separated, often for long periods of time.

Policymakers are increasingly focusing on financial education as a tool to empower individuals to manage their finances for a lifetime of financial well-being. But does financial literacy impact savings and remittance among migrant domestic workers?

Preliminary findings from a recent pilot randomised control trial in Singapore with Filipino domestic workers suggest that financial education has no effect on financial knowledge and behaviour. However, assignment to a financial education programme leads to negative effect on savings among female migrants. This is driven by migrants with less than median baseline income and those with children. There is also some evidence of increased bargaining power among the migrants.

Dr Barua will discuss the findings from the study.

Seminar presentation (1.5 MB)

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