On Her Own Account: How Strengthening Women’s Financial Control Impacts Labor Supply and Gender Norms

This intervention increased women’s work and shifted social gender norms, both in the pro-gram and in the private sector, despite no change in wages.

• Receiving only a bank account, without linking the account to MGNREGS, had no ob-servable impact on women’s employment or earnings. 
• Receiving linked bank accounts along with training sessions had substantial positive impacts on women’s work in the both the short and long-run female labor supply in-creased (0.11 standard deviation units p<.01).
  • Receiving linked bank accounts along with training had significant and sus-tained effects for constrained women—that is, women who are less likely to have worked absent intervention and whose husbands perceive higher social costs to having a wife who works—relative to the control group (0.21 standard deviation units p<.01). 
• On measures of women’s empowerment (engagement in making purchases, mobility, self-reported decision-making, and freedom from gender-based violence) researchers observe gains among constrained women, particularly in terms of mobility and eco-nomic engagement. 
  • Constrained women who received linked bank accounts along with training were more likely than women who only received bank accounts (0.75 standard deviation units, p<.05).
• Relative to the control group, women who received linked bank accounts plus infor-mation sessions were more likely to engage in economic transactions outside the household using their own money. 
• Women who received linked bank accounts plus information sessions experienced an increase in female bargaining power in the household, which women used to push back against social norms (such as the idea that women should not work because it would bring social stigma on a man for not economically providing for his household) that have been internalized by their husbands.
  • Women who received linked bank accounts plus information sessions experienced a liberalizing shift in their own social norms, possibly related to their choice to work more (0.10 standard deviation units, p<.05).
  • Women who received linked bank accounts plus information sessions experienced a liberalizing shift in how they perceived the social norms of others (0.08 standard deviation units, p<.10), with respondents more likely to state that a working woman and her husband receive community respect.

Based on these findings, although social norms continue to play an important role in keeping Indian women out of the labor force, women can push back against these norms when they gain bargaining power receive their own bank accounts, have their earnings automatically de-posited into them, and are trained on how to use the accounts. These bank accounts and the earnings women gain access to increase women’s bargaining power and their workforce participation.
 

This study targeted poor rural households in 197 local government units in Gwalior, Morena, Sheopur, and Shivpuri, districts in northern Madhya Pradesh with severe gender inequities. Through random selection, 66 communities were assigned to the control group, 68 communi-ties had bank accounts opened for women employed by MGNREGS, and 65 communities had women’s accounts linked to the MGNREGS payment system so that their wages would flow directly into their accounts. A two-hour intervention providing basic training on local kiosk (Customer Service Points) operation was cross-randomized, with half of the communities se-lected for bank accounts receiving the training. Analysis combined administrative data from the MGNREGS public database, administrative bank data, a short, baseline screening of 14,088 households, and a detailed endline survey of 4,500 of the 5,851 eligible couples.