Microfinance and Human Development: A Cross-Generation Study
01 Jan 2017-pp 119-130
TL;DR: In this paper, the impact of micro-finance on education and career choice of the second generation of microfinance users, daughters and daughters-in-law, compared to the original micro-inance borrowers and non-borrowers was evaluated.
Abstract: Microfinance has been accepted as a potent instrument to improve the living standards of the ultra-poor women in developing and least developed countries in the world. Most of the research studies inferred that participation in microfinance initiatives has a positive impact on female labor force participation rate, which in turn improve their initial consumption and empowerment. A relatively more empowered woman is expected to exercise agency and make strategic life choices in a context, where women’s ability to set their own goals and pursue them is seriously constrained by an in egalitarian gender system. These strategic life choices normally include their children’s schooling and education, their own healthcare options, and ability to earn and spend according to their own will. Thus, involvement in income-generating activities using microfinance which leads to improving/enhancing decision making of women may not only improve their own lives but is expected to improve the quality of human development over generations. It would be thus interesting to explore how far a mother with long-term engagement in microfinance can take progressive steps to reduce early dropouts of her daughters from educational institutions and also to give freedom to her daughter-in-law to pursue career choices, as manifestations of comprehensive long-term development. Given this backdrop, the chapter aims to capture the impact of microfinance use on 1200 middle-aged women on the overall human development of women of their next generation. The specific objective of the study is to assess the impact of microfinance on education and career choice of the second generation of microfinance users, daughters and daughters-in-law, compared to the original microfinance borrowers and non-borrowers. Using propensity score matching techniques of impact evaluation, the chapter does not identify that among the second-generation women of microfinance borrowers, education nor financial inclusion appears to be statistically higher compared to that of non-borrowing control groups. Thus, the impact of microfinance seems to fizzle out without sustainability, representing a sure sign of mission drift.
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TL;DR: In this paper, the authors used a dynamic modeling approach to group clients of a microcredit program in Brazil and follow them over time, identifying five segments based on variables related to business, owners, families and operations performed within the programme.
Abstract: This study uses a dynamic modelling approach to group clients of a microcredit programme in Brazil and follows them over time. Five segments are identified based on variables related to business, owners, families and operations performed within the programme. Results show that borrowers' circumstances are diverse and different actions are needed for each group. Many customers remained in the same segment; some moved to segments with worse conditions. However, the fact that one fourth of borrowers improved conditions is promising, considering the risky nature of entrepreneurial activity and the Brazilian economic context. Our analyses show that mission drift does not occur.
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4,827 citations
TL;DR: In this article, the authors consider causal inference and sample selection bias in nonexperimental settings in which few units in the nonex-experiment comparison group are comparable to the treatment units, and selecting a subset of comparison units similar to treatment units is difficult because units must be compared across a high-dimensional set of pre-treatment characteristics.
Abstract: This paper considers causal inference and sample selection bias in nonexperimental settings in which (i) few units in the nonexperimental comparison group are comparable to the treatment units, and (ii) selecting a subset of comparison units similar to the treatment units is difficult because units must be compared across a high-dimensional set of pre-treatment characteristics. We discuss the use of propensity score-matching methods, and implement them using data from the National Supported Work experiment. Following LaLonde (1986), we pair the experimental treated units with nonexperimental comparison units from the CPS and PSID, and compare the estimates of the treatment effect obtained using our methods to the benchmark results from the experiment. For both comparison groups, we show that the methods succeed in focusing attention on the small subset of the comparison units comparable to the treated units and, hence, in alleviating the bias due to systematic differences between the treated and compariso...
3,920 citations
TL;DR: In this article, the authors show that unearned income in the hands of a mother has a bigger effect on her family's health than income under the control of a father; for child survival probabilities the effect is almost twenty times bigger.
Abstract: If household income is pooled and then allocated to maximize welfare then income under the control of mothers and fathers should have the same impact on demand. With survey data on family health and nutrition in Brazil, the equality of parental income effects is rejected. Unearned income in the hands of a mother has a bigger effect on her family's health than income under the control of a father; for child survival probabilities the effect is almost twenty times bigger. The common preference (or neoclassical) model of the household is rejected. If unearned income is measured with error and income is pooled then the ratio of maternal to paternal income effects should be the same; equality of the ratios cannot be rejected. There is also evidence for gender preference: mothers prefer to devote resources to improving the nutritional status of their daughters, fathers to sons.
2,012 citations
TL;DR: In this paper, a model is examined in which the ability to build on the human capital of one's elders plays an important role in linking growth to schooling, and it is shown that the impact of schooling on growth explains less than one third of the empirical cross-country relationship.
Abstract: A number of economists find that growth and schooling are highly correlated across countries. A model is examined in which the ability to build on the human capital of one's elders plays an important role in linking growth to schooling. The model is calibrated to quantify the strength of the effect of schooling on growth by using evidence from the labor literature on Mincerian returns to education. The upshot is that the impact of schooling on growth explains less than one-third of the empirical cross-country relationship. The ability of reverse causality to explain this empirical relationship is also investigated.
1,910 citations
TL;DR: In this article, the impact of participation, by gender, in the Grameen Bank and two other group-based micro credit programs in Bangladesh on labor supply, schooling, household expenditure, and assets is estimated.
Abstract: This paper estimates the impact of participation, by gender, in the Grameen Bank and two other group-based micro credit programs in Bangladesh on labor supply, schooling, household expenditure, and assets. The empirical method uses a quasi-experimental survey design to correct for the bias from unobserved individual and village-level heterogeneity. We find that program credit has a larger effect on the behavior of poor households in Bangladesh when women are the program participants. For example, annual household consumption expenditure increases 18 taka for every 100 additional taka borrowed by women from these credit programs, compared with 11 taka for men.
1,745 citations