This paper provides empirical evidence regarding the causal effects that upgrading slum dwellings has on the living conditions of the extremely poor. In particular, we study the impact of providing better houses in situ to slum dwellers in El Salvador, Mexico and Uruguay. We experimentally evaluate the impact of a housing project run by the NGO TECHO (“roof”), which provides basic pre-fabricated houses to members of extremely poor population groups in Latin America. The main objective of the program is to improve household well-being. Our findings show that better houses have a positive effect on overall housing conditions and general well-being: the members of treated households are happier with their quality of life. In two countries, we also document improvements in children’s health; in El Salvador, slum dwellers who have received the TECHO houses also feel that they are safer. We do not find this result, however, in the other two experimental samples. There are no other noticeable robust effects in relation to the possession of durable goods or labor outcomes. Our results are robust in terms of both their internal and external validity because they are derived from similar experiments in three different Latin American countries.
We implemented a randomized field experiment that tested ways to stimulate savings by international migrants in their origin country. We find that migrants value and take advantage of opportunities to exert greater control over financial activities in their home countries. In partnership with a Salvadoran bank, we offered U.S.-based migrants bank accounts in El Salvador. We randomly varied migrant control over El Salvador-based savings by offering different types of accounts across treatment groups. Migrants offered the greatest degree of control accumulated the most savings at the partner bank, compared to others offered less or no control over savings. Impacts are likely to represent increases in total savings: there is no evidence that savings increases were simply reallocated from other savings mechanisms. Enhanced control over home-country savings does not affect remittances sent home by migrants.
We implement a randomized experiment offering Salvadoran migrants matching funds for educational remittances, which are channeled directly to a beneficiary student in El Salvador chosen by the migrant. The matches lead to increased educational expenditures, higher private school attendance, and lower labor supply of youths in El Salvador households connected to migrant study participants. We find substantial “crowd-in” of educational investments: for each $1 received by beneficiaries, educational expenditures increase by $3.72. We find no shifting of expenditures away from other students, and no effect on remittances.