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

By directly depositing wages into women’s own bank accounts paired with information sessions teaching them how to use bank accounts, India’s public workfare program increased female labor force participation in Madhya Pradesh.


Though India’s economy has rapidly developed in recent decades, there is still a significant gender gap in the country’s labor market, with women’s labor force participation rate dropping from 37% in 1990 to 28% in 2015. Although Indian women have one of the lowest employment rates in the world, nearly one third of Indian housewives express interest in working. One factor that may prevent these women from joining the labor force is the societal expectation that men economically provide for their households – if men prefer that their wives don’t work, women might stay out of the labor market even when they are interested in taking a job. Indeed, in a nationally representative survey in 2011, 52% of Indian women reported that their husband has the most say in the decision of whether they can work.  

To test whether strengthening women’s bargaining power increases their ability to work, this paper studied the impacts of an intervention on the Mahatma Gandhi National Rural Employ-ment Guarantee Scheme (MGNREGS), India’s public workfare program entitling over 55 million Indian households to 100 days of minimum wage work per year. In communities targeted as treatment groups in this study, women were enrolled in bank accounts, and half of these women received direct deposit of MGNREGS wages. With the linking of these accounts, women’s wages flowed directly into their own accounts, rather than into the accounts of the male head of the household. Since most women had no previous banking experience, the study also cross-randomized a two-hour training session on how to use the local bank kiosks that serviced these accounts. 


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. 

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