Motivating migrants can lead to better savings: Study reveals

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Migrating abroad is very frequently seen in students after completion of their studies. Survey says that more than 200 million people leave their homelands for low-wage jobs including as maids and construction labourers.

Survey was held to know how motivation works on the savings of these workers. Dean Yang, associate professor of economics and public policy at the University of Michigan and Ganesh Seshan of Georgetown University in Qatar, decided to find out whether motivating these workers can help them save more money.

 

The study, recently published in the Journal of Development Economics, covered 200 migrant men from Kerala working in Doha, Qatar.

Also, the researchers aimed to understand if the workers could make better financial decisions with their spouses by attending a motivational talk on personal finance.

“We wanted to work with a migrant population that was largely represented in the Arabian Gulf countries. Indians constitute the largest group of migrants in these countries and so we chose this group.” –Seshan

First of all, all the men were distributed according to their age, educational backgrounds and professions. The latter received a three-hour motivational pep talk on saving by financial expert KV Shamsudheen, a popular Keralite motivational speaker who runs his radio show in the United Arab Emirates.

Says Yang, “This was a simple one-time targeted motivational session that had a big impact. And even though there wasn’t much technical information, the hope was that the session would motivate the migrants to save more.”

With a PowerPoint presentation, Shamsudheen discussed why migrants needed to save more money and make joint decisions with their spouses. About 13-17 months after the session, the researchers conducted follow-up surveys to check if there were improvements.

While the workers were mostly interviewed in person, they phoned their wives in India to gauge the impact of the session. To eliminate external factors that could have affected the treatment group into increasing their savings, the researchers used the randomised control trial (RCT) methodology.

“This methodology is regarded as the ‘gold standard’ for impact evaluation by most researchers. Since both groups shared similar characteristics on average prior to the workshop, any common shocks that could have affected both parties have been accounted for.”-Seshan says.

The post-workshop surveys revealed that the migrants reported a 30% increase in making financial decisions together with their better halves, who reported a significantly enhanced interest in seeking financial education for themselves.

In a subset of families, which initially reported saving less, savings grew by 34.5% and remittances by 13.2%, the study showed.

Source:TOI

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