No.26 How Mental Accounting, and Financial Literacy Shape the Financial Situation of Overseas Filipino Workers (OFWs): A Multinomial Logistic Regression Study

  • #Discussion Papers

This study explores the factors affecting the financial situation of overseas Filipino workers (OFWs), using survey data from 313 OFWs in two rural areas of the Philippines: Dingras and Bansalan. A multinomial logistic regression model was employed to analyze the influence of various aspects, including mental accounting, self-control, human capital, remittance behavior, and financial literacy, on the balance between income and expenditure. The findings indicate that higher education, long-term future orientation, and enhanced self-control contribute positively to better financial management, while participation in financial literacy programs, the presence of loans, and high personal expenditures are associated with poorer financial outcomes. The study introduces a novel method for measuring self-control among OFWs through a hypothetical scenario involving Jollibee, a popular fast-food chain in the Philippines. The paper concludes with policy recommendations to improve financial literacy, loan management, and spending habits, thereby enhancing the financial well-being of OFWs and their families.

Keywords:Overseas Filipino Workers, Mental Accounting, Financial literacy, Remittance Behavior

Author
MURATA Akira
Date of issuance
October 2024
Language
English
Number of pages
33
Related areas
  • #Asia
Topics
  • #Poverty Reduction
Research area
Economic Growth and Poverty Reduction
Research project