Calling the Shots: Determinants of Financial Decision-making and Behavior in Domestic Migrant Households in India

Abstract

This article explores financial decision-making and behavior in migrant households. Literature on migration and financial inclusion usually focuses on either migrant workers and their financial needs or remittance flows and their effects on development, leaving the subject of household decision-making significantly underresearched. Using primary data from two sample surveys, one with migrant workers and one with their household members, we employ descriptive analysis to study the financial decision-making processes and outcomes. Our sample is mostly composed of male Indian domestic migrants from Bihar, Jharkhand, and eastern Uttar Pradesh. Our analysis considers the following migrant typology dimensions: duration of migration cycle, skills, and destination. Key household characteristics explored in our study include household size, the number of financial contributors in the household, the presence of an older male and children below the age of 18, and overall household income. Our results show that household members compete for influence over financial decisions and power balances change significantly whether the migrant is at home or at destination. These dynamics play an important role in determining household financial preferences. This suggests that financial products and interventions targeting specific financial behavior (for instance, financial literacy programs) need to take these factors into account since different households and different migrant types make these choices differently. JEL Codes: D14, O15, O16