The added value of financial education upon return: The case of foreign domestic workers in Singapore

Globalization has transformed the international division of labor and increasingly relied upon migrant labor (Pettman 2003:173). More rapid economic development of countries in Asia creates employment opportunities for migrant workers (both male and female), primarily low-skilled and low-paid jobs, which locals are unwilling to do (Yeoh and Huang 1998:584). Not only have more women participated in global economy as a source of cheap labor, they also outnumbered male counterparts (OECD1998). Remittances have widely become a solution for their poor family at home. International migration opens a hope for better income and household’s upward mobility but it does not always guarantee a long-term poverty reduction. Because this is a temporary migration, unstable and low incomes remain an unsecured solution, particularly at post-migration stage. Moreover, managing family from afar, they find it hard to actively improve family conditions. Domestic workers always bear unpredictable vulnerabilities and dire conditions that may end up their life with no amassed money but a huge bondage, even a death. Without financial knowledge, female migrant workers and their families have a tendency to spend most of money on domestic consumptions than investments (Mavrinac 2008; Taylor 2006). This paper examines the behavioral and attitudinal changes in financial planning and self-development of domestic workers after getting financial literacy and entrepreneurship education from aidha - a not-for-profit micro-business school created by the National Committee of United Nations Development Funds for Women (UNIFEM) Singapore in 2006. aidha dedicated to ending the cycle of poverty for female domestic workers through early financial literacy and entrepreneurship. This approach reflects the new aspects of changing relationship between domestic workers and employers in Singapore in respect to a need of long- term skills for development and empowerment for female migrants besides selling their labor. When dealing with financial stress upon return, obtained financial knowledge and entrepreneurial skills from aidha give domestic workers better understandings of the challenge and the necessity for saving. Findings from this paper show that international migration, in combination with financial literacy and entrepreneurship can make a positive effect on poverty reduction in long run. At individual level, capacity building, higher self-esteem and friendship domestic workers get from aidha membership may assist them in improving work performances and providing necessary preparations for a sustainable return.