Access to Credit, Education, and Women’s Say in the Household: Evidence from Bangladesh

Boulier, Bryan and Emran, M. Shahe and Hoque, Nazmul (2021): Access to Credit, Education, and Women’s Say in the Household: Evidence from Bangladesh.

Abstract

A substantial literature on women’s say in the household focuses on microcredit, but there is little evidence on the relative roles of credit and education. Using household survey data from Bangladesh, we provide a comparative analysis of the effects of education and microcredit on women’s decision making power in the household. We implement two econometric approaches: bias adjusted OLS estimator of Oster (2019) that extends the Altonji et al. (2005) approach where selection on observables is used as a guide to selection on unobservables, and doubly robust radius matching estimator of Lechner et al. (2011). The evidence suggests a limited impact of microcredit, consistent with the recent evidence from RCT based studies. In contrast, education is much more important for enhancing women’s say in a range of household decisions. There is no significant interaction effect between education and credit. Evidence from Gelbach decomposition suggests that outside employment is an important mediating mechanism, but household wealth and assortative marriage matching on education are not important. The impact of education on women’s decision making remains strong even after controlling for these mediating factors, pointing to the importance of other mechanisms such as self-confidence and better negotiation skills of educated women.

• Item Type: MPRA Paper
• Language: English
• Keywords: Women’s Empowerment, Household Decision Making, Women’s Education, Microcredit, Bangladesh
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C31 - Cross-Sectional Models ; Spatial Models ; Treatment Effect Models ; Quantile Regressions ; Social Interaction Models; G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; J - Labor and Demographic Economics > J1 - Demographic Economics > J16 - Economics of Gender ; Non-labor Discrimination; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General

References

Agarwal, B. (1997). Bargaining and gender relations: Within and beyond the household. Food Consumption and Nutrition Division Discussion Paper No. 27. Washington, D.C.: International Food Policy Research Institute.

Altonji, J. G., Elder, T. E., & Taber, C. R. (2005). Selection on observed and unobserved variables: Assessing the effectiveness of Catholic schools. Journal of Political Economy, 113(1), 151-184.

Anderson, S., & Eswaran, M. (2009). What determines female autonomy? Evidence from Bangladesh. Journal of Development Economics, 90 (2), 179-191.

Bajracharya, A., & Amin, S. (2013). Microcredit and Domestic Violence in Bangladesh: An Exploration of Selection Bias Influences. Demography, 50 (5), 1819-1843.

Banerjee, A., Duflo, E., Glennerster, R., & Kinnan, C. (2015). The miracle of microfinance? Evidence from a randomized evaluation. American Economic Journal: Applied Economics, 7(1), 22-53.

Banerjee, A (2013), Microcredit Under the Microscope: What Have We Learned in the Past Two Decades, and What Do We Need to Know? Annual Review of Economics, 5 (1), 487-519.

Banerji, M, Steven P. Martin and Sonalde Desai (2013). Are the Young and the Educated More Likely to Have Love than Arranged Marriage? A Study of Autonomy in Partner Choice in India. Working paper, University of Maryland.

Bloom, S. S., Wypij, D., & Das Gupta, M. (2001). Dimensions of women’s autonomy and the influence on maternal health care utilization in a North Indian City. Demography, 38(1), 67-78.

Card, D. (1999). The causal effect of education on earnings. Handbook of Labor Economics, 3, 1801-1863.

Dixon-Mueller, R. (1998). Female empowerment and demographic processes: Moving beyond Cairo. Policy and Research Papers No. 13. Paris: IUSSP.

Duflo, E. (2012). Women Empowerment and Economic Development, Journal of Economic Literature, 50 (4), 1051-1079.

Emran, M. S., Maret-Rakotondrazaka, F., & Smith, S. C. (2014). Education and freedom of choice: Evidence from arranged marriages in Vietnam. Journal of Development Studies, 50(4), 481-501.

Emran, M. S., Morshed, A. K. M., & Stiglitz, J. E. (2021). Microfinance and Missing Markets. Canadian Journal of Economics, 54 (1), 34-67.

Elbers, C., & Gunning, J. W. (2014). Evaluation of development programs: randomized controlled trials or regressions?. The World Bank Economic Review, 28(3), 432-445.

Eswaran, M. (2014). Why gender matters in economics. Princeton University Press.

Garikipati, S. (2008). The impact of lending to women on household vulnerability and women’s empowerment: evidence from India. World Development, 36(12), 2620-2642.

Gelbach, J. B. (2016a). When do covariates matter? And which ones, and how much? Journal of Labor Economics, 34(2), 509-543. https://doi.org/10.1086/683668.

Goetz, A. M., & Gupta, R. Sen. (1996). Who takes the credit? Gender, power, and control over loan use in rural credit programs in Bangladesh. World Development, 24(1), 45-63.

Hashemi, S. M., Schuler, S. R., & Riley, A. P. (1996). Rural credit programs and women’s empowerment in Bangladesh. World Development, 24(4), 635-653.

Kabeer, N (1999), Resources, Agency, and Achievements: Reflections on the Measurement of Women’s Empowerment. Development and Change, 30 (3), 435-464.

Kabeer, N. (2001). Conflicts over credit: re-evaluating the empowerment potential of loans to women in rural Bangladesh. World Development, 29(1), 63-84.

Kabeer, N. (2005). Is microfinance a magic bullet for women’s empowerment? Analysis of findings from South Asia. Economic and Political Weekly, 4709-4718.

Kabeer, N. (2016) Economic pathways to womens empowerment and active citizenship: what does the evidence from Bangladesh tell us? The Journal of Development Studies, 53 (5), 1-15.

Koenig, M. A., Ahmed, S., Hossain, M. B., & Alam Mozumder, M. K. (2003). Women’s status and domestic violence in rural Bangladesh: Individual- and community-level effects. Demography, 40 (2), 269-288.

Lechner, M., Miquel, R., & Wunsch, C. (2011). Long-run effects of public sector sponsored training in West Germany. Journal of the European Economic Association, 9(4), 742-784.

Malhotra, A, and M. Mather (1997), Do Schooling and Work Empower Women in Developing Countries? Gender and Domestic Decisions in Sri Lanka. Sociological Forum, 12 (4), 599-630.

NIPORT, Associates, M. &, & International, M. (2013). Bangladesh Demographic and Health Survey 2011.

Oster, E. (2019). Unobservable selection and coefficient stability: Theory and evidence. Journal of Business & Economic Statistics, 37(2), 187-204.

Ravallion, M. (2009). Should the Randomistas rule? The Economists’ Voice, 6(2).

Roodman, D., & Morduch, J. (2014). The impact of microcredit on the poor in Bangladesh: Revisiting the evidence. Journal of Development Studies, 50(4), 583-604.

Sen, A. (1999). Development as freedom. Oxford: Oxford University Press.

World Bank. (2012). World Development Report 2012: Gender equality and develop- ment. World Bank.