Exploring the dimensions of financial literacy of Overseas Filipino Workers (OFWs)

Abstract

This paper aims to explore the dimensions of financial literacy (FL) among Overseas Filipino Workers (OFWs) in the United Arab Emirates (UAE). Utilizing a mixed-method research design, preliminary qualitative interviews with OFWs became the basis in the development of a 50-item scale responded by 250 OFWs to extract the FL facets through an approach called dimensionality reduction technique. Under this, exploratory factor analysis (EFA) was used and 46 items were found to successfully load across five dimensions after 15 rotations, labelled as Factor 1: proactive financial engagement, Factor 2: prudent financial management, Factor 3: strategic financial improvement, Factor 4: experiential financial competence, and Factor 5: breadwinner's financial dilemma. The five constructs were revealed to jointly explain 62.918% of the variance. With these findings, the study underscores the need to develop a specific tailored FL intervention to enhance OFWs' financial wellbeing in the UAE. This work yields policy and practical implications pertinent to policymakers, educational organizations, and financial institutions interested in promoting FL among migrant workers.