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Significant income gains from migrating from poorer to richer countries have motivated unilateral (source-country) policies facilitating labor emigration. However, their effectiveness is unknown. We conducted a large-scale randomized experiment in the Philippines testing the impact of unilaterally facilitating international labor migration. Our most intensive treatment doubled the rate of job offers but had no identifiable effect on international labor migration. Even the highest overseas job-search rate we induced (22%) falls far short of the share initially expressing interest in migrating (34%). We conclude that unilateral migration facilitation will at most induce a trickle, not a flood, of additional emigration.

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Published Paper
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November 10, 2015
English

There is a disconnect between academic economists’ search for individual mechanisms that constrain firm growth and the more complex reality facing firms and policymakers aiming to alleviate these constraints. The comprehensive, some would say scattershot, approaches that are common in practice are considered challenging for evaluators because of the difficulty in identifying any particular causal mechanism. More targeted attempts to improve business performance typically generate mixed performance (McKenzie and Woodruff 2012) or do not seem to scale either in the market or with public support.

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Working Paper
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May 28, 2015

There is a disconnect between academic economists’ search for individual mechanisms that constrain firm growth and the more complex reality facing firms and policymakers aiming to alleviate these constraints. The comprehensive, some would say scattershot, approaches that are common in practice are considered challenging for evaluators because of the difficulty in identifying any particular causal mechanism. More targeted attempts to improve business performance typically generate mixed performance (McKenzie and Woodruff 2012) or do not seem to scale either in the market or with public support.

With that in mind, we partnered with the Asian Institute of Management (AIM), a leading Philippine business school, to launch a classbased program that had MBA students providing consulting services for local small and medium enterprises.

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Published Paper
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May 01, 2015
English

Seven randomized evaluations from around the world show that microcredit does not have a transformative impact on poverty, but it can give low-income households more freedom in optimizing the ways they make money, consume, and invest.

 
Key Results:
  • Demand for many of the microcredit products was modest. In Ethiopia, India, Mexico, and Morocco, when MFIs offered loans to eligible borrowers, take-up ranged from 13 to 31 percent, which was much lower than partner MFIs originally forecasted.
  • Expanded credit access did lead some entrepreneurs to invest more in their businesses. In Bosnia and Herzegovina and Mongolia, access to microcredit increased business ownership. All but one study showed some evidence of expanded business activity, but these investments rarely resulted in profit increases.
  • Microcredit access did not lead to substantial increases in income. Despite some evidence of business expansion, none of the seven studies found a significant impact on average household income for borrowers.
  • Expanded access to credit did afford households more freedom in optimizing how they earned and spent money.
  • Six studies suggest that microcredit played an important role in increasing borrowers’ freedom of choice in the ways they made money, consumed, invested, and managed risk.
  • There is little evidence that microcredit access had substantial effects on women’s empowerment or investment in children’s schooling, but it did not have widespread harmful effects either. Microcredit did not lead to increases in children’s schooling in the six studies in which it was measured, and only one of the four studies that measured women’s empowerment found a positive effect. Across all seven studies, researchers did not find that microcredit had widespread harmful effects, even with individual-liability lending or a high interest rate. 
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Brief
Date:
February 26, 2015
English

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. We find that the introduction of simple labeling for education raises remittances by more than 15%. Adding the ability to directly send this funding to the school adds only a further 2.2%. We randomly vary the information asymmetry between migrants and their most closely connected household, but find no significant change in the remittance response to these forms of commitment as information varies. Behavior in these games is then shown to be predictive of take-up of a new financial product called EduPay, designed to allow migrants to directly pay remittances to schools in the Philippines. We find this take-up is largely driven by a response to the ability to label remittances for education, rather than to the hard commitment feature of directly paying schools.

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Published Paper
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January 07, 2015
English

Group liability in microcredit purports to improve repayment rates through peer screening, monitoring, and enforcement. However, it may create excessive pressure, and discourage reliable clients from borrowing. Two randomized trials tested the overall effect, as well as specific mechanisms. The first removed group liability from pre-existing groups and the second randomly assigned villages to either group or individual liability loans. In both, groups still held weekly meetings. We find no increase in short-run or long-run default and larger groups after three years in pre-existing areas, and no change in default but fewer groups created after two years in the expansion areas.

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Published Paper
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March 01, 2014

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