Monitoring the Sending and Spending of Remittances: A Lab in the Field Experiment among Salvadoran Migrants and Their Families

Kate Ambler, University of Michigan

I implement an experiment among 1,300 Salvadoran migrants and their family members (recipients) in El Salvador that examines the impact that changing the ability of the participants to monitor each other and reveal their preferences has on remittance decisions. Migrants decide how much of a $600 lottery prize to keep and how much to send as a remittance. Recipients decide how to spend a $300 remittance prize. Participants are randomly allocated into two groups: either told their partner will be informed of their choice or that it will be a secret. Half the recipients are also informed of the migrants’ preferences for their choice. Migrants keep significantly more when their choice is secret. Participants make choices closest to the migrant’s preferences when their choice will be revealed and they are informed of the migrant’s preferences. The effects are only present in pairs where the likelihood of contract enforcement is high.