Economic Opportunity

Carr, Marilyn, Martha A Chen, and Jane Tate. “Globalization and Home-Based Workers”. Feminist Economics 63 (2000): , 6, 3, 123-142. Web. Publisher's VersionAbstract

Globalization presents threats to and opportunities for women working in the informal sector. The paper, which draws on the work of Women in Informal Employment: Globalizing and Organizing (WIEGO) Global Markets Program and of HomeNet, focuses on women home-based workers and analyzes, within the framework of global value-chains, the impact of globalization on labor relations and other market transactions. The chains reviewed are: manufactured goods (fashion garments); agricultural products (nontraditional exports); and nontimber forest products (shea butter). The paper shows how this form of analysis helps to identify the uneven distribution of power and returns within the chains – between rich and poor and between women and men. It concludes by emphasizing the importance of the work of the Self-Employed Women's Association (SEWA), HomeNet, and StreetNet in organizing home-based workers, both locally and internationally, as well as that of WIEGO in supporting them.

Help microfinance, don’t kill it

Help microfinance, don’t kill it

November 26, 2010

By Abhijit Banerjee, Pranab Bardhan, Esther Duflo, Erica Field, Dean Karlan, Asim Khwaja, Dilip Mookherjee, Rohini Pande and Raghuram Rajan
The Indian Express

Bowles, Hannah Riley, May Al Dabbagh, and Bobbi Thomason. “Anticipated Status Decline for Locals Entering Global Employment Markets”. (2014). Web. Publisher's VersionAbstract

Qualitative research on multi-national work life has begun to illuminate how status hierarchies emerge and are maintained between workers more closely aligned with the dominant global business culture (e.g., Anglo-Americans) and those attempting to assimilate from other cultural backgrounds. In two studies, we compare the psychological experience of global and national job markets for university students from a rapidly globalizing emerging market. We recruited study participants from national universities in the Arab Gulf in which students are trained in English for work in global business markets. Negatively stereotyped as “lazy locals” in the Western-dominated global work culture, we find that male nationals feel more reticent to negotiate for career rewards (viz., compensation) in a global (versus local) business context (Study 1) and that they are more negatively evaluated by their peers for attempting to negotiate for higher pay in a global (vs. local) business context. Replicating U.S. studies, in the local business context we find that female (versus male) nationals feel more reticent to negotiate for higher pay (Study 1) and are more negatively evaluated when they do (Study 2). There were no gender differences in the propensity to negotiate or in the evaluation of negotiators in the global work context. In Study 2, mediation analyses support the proposition that, for male nationals in the global work culture, negotiating for higher compensation violates prescriptions of low-status behavior (viz., communality). Evaluators penalize female negotiators for a lack of communality, but also for perceived immodesty and materialism. We discuss implications for the study of global-local status hierarchies in multi-national employment contexts.

Feigenberg, Ben, Erica Field, and Rohini Pande. “The Economic Returns to Social Interaction: Experimental Evidence from Microfinance”. Review of Economic Studies (2013). Web. Publisher's VersionAbstract

Microfinance clients were randomly assigned to repayment groups that met either weekly or monthly during their first loan cycle, and then graduated to identical meeting frequency for their second loan. Long-run survey data and a follow-up public goods experiment reveal that clients initially assigned to weekly groups interact more often and exhibit a higher willingness to pool risk with group members from their first loan cycle nearly two years after the experiment. They were also three times less likely to default on their second loan. Evidence from an additional treatment arm shows that, holding meeting frequency fixed, the pattern is insensitive to repayment frequency during the first loan cycle. Taken together, these findings constitute the first experimental evidence on the economic returns to social interaction, and provide an alternative explanation for the success of the group lending model in reducing default risk.

Field, Erica, and Rohini Pande. “Repayment Frequency and Default in Micro-Finance: Evidence from India”. Journal of European Economic Association Papers and Proceedings 6 .(2-3) (2008): , 6 , (2-3), 501-550. Web. Publisher's VersionAbstract

In stark contrast to bank debt contracts, most micro-finance contracts require that repayments start nearly immediately after loan disbursement and occur weekly thereafter. Even though economic theory suggests that a more flexible repayment schedule would benefit clients and potentially improve their repayment capacity, micro-finance practitioners argue that the fiscal discipline imposed by frequent repayment is critical to preventing loan default. In this paper we use data from a field experiment which randomized client assignment to a weekly or monthly repayment schedule and find no significant effect of type of repayment schedule on client delinquency or default. Our findings suggest that, among micro-finance clients who are willing to borrow at either weekly or monthly repayment schedules, a more flexible schedule can significantly lower transaction costs without increasing client default. (JEL: O12, O16, O22)

Ashraf, Nava, Oriana Bandiera, and Kelsey B Jack. “No Margin, No Mission? A Field Experiment on Incentives for Public Services Delivery”. (2014). Web. Publisher's VersionAbstract

We conduct a field experiment to evaluate the effect of extrinsic rewards, both financial and non-financial, on the performance of agents recruited by a public health organization to promote HIV prevention and sell condoms. In this setting: (i) non-financial rewards are effective at improving performance; (ii) the effect of both rewards is stronger for pro-socially motivated agents; (iii) the effect of both rewards is stronger when their relative value is higher. The findings illustrate that extrinsic rewards can improve the performance of agents engaged in public service delivery, and that non-financial rewards can be effective in settings where the power of financial incentives is limited. 

Ashraf, Nava, Dean Karlan, and Wesley Yin. “Female Empowerment: Impact of a Commitment Savings Product in the Philippines”. World Development 38.3 (2010): , 38, 3, 33–344. Web. Publisher's VersionAbstract

Female “empowerment” has increasingly become a policy goal, both as an end to itself and as a means to achieving other development goals. Microfinance in particular has often been argued, but not without controversy, to be a tool for empowering women. Here, using a randomized controlled trial, we examine whether access to and marketing of an individually held commitment savings product lead to an increase in female decision-making power within the household. We find positive impacts, particularly for women who have below median decision-making power in the baseline, and we find this leads to a shift toward female-oriented durables goods purchased in the household.

Bowles, Hannah Riley, and Linda Babcock. “A model of when to negotiate: Why women don’t ask”. The Oxford Handbook of Conflict Resolution. New York: Oxford University Press, 2012. 313-331. Web. Publisher's VersionAbstract

Research suggests that women are more likely than men to pass over opportunities to negotiate for higher compensation. Studies from the laboratory, surveys, and field suggest that men are at least four times more likely than women to negotiate for compensation (Babcock & Laschever, 2003; Small, Gelfand, Babcock, & Gettman, 2007). When they do negotiate, women tend to claim smaller percentage increases than men on their initial salary offers (Brett & Stroh, 1997; Gerhart & Rynes, 1991; Stevens, Bavetta, & Gist, 1993). Aghast by women’s apparent lack of negotiating ability as well as the implications of this “gender negotiation gap” for the gender wage gap, both policy makers and professors have proposed additional training for women to raise their negotiating aspirations and effectiveness.

In this chapter, we argue that this apparent perceived bargaining deficiency on women’s part is actually a rational response to the differences in incentives and expectations that men and women face in compensation negotiations—one that is obscured by focusing solely on the immediate material payoffs from negotiation … We propose a two-period model in which employees make decisions about whether to negotiate for higher compensation in period one. Our purpose in creating a mathematical model is to be very concrete about the different effects that negotiating may have on a person’s utility and then to investigate how optimal decisions are affected by the gendered behavioral norms and expectations. 

Ganguli, Ina, Ricardo Hausmann, and Martina Viarengo. “Closing the Gender Gap in Education: What is the State of Gaps in Labor Force Participation for Women, Wives and Mothers?”. International Labour Review (2014). Web. Publisher's VersionAbstract
The education gap between men and women has closed, or has even reversed in many countries. Have countries also made progress in closing other gaps facing women? Using micro-level Census data for close to 40 countries, we examine several dimensions of gender disparity: we compare men and women's labor force participation (the labor force participation gap), married and single women's labor force participation (the marriage gap), and mothers' and non-mother's labor force participation (the motherhood gap). We show that there is significant heterogeneity among countries in terms of the size and the speed at which the gaps are changing.
Field, Erica, et al.Repayment Flexibility Can Reduce Financial Stress: A Randomized Control Trial with Microfinance Clients in India.”. PLoS One 79 (2012). Web. Publisher's VersionAbstract

Financial stress is widely believed to cause health problems. However, policies seeking to relieve financial stress by limiting debt levels of poor households may directly worsen their economic well-being. We evaluate an alternative policy – increasing the repayment flexibility of debt contracts. A field experiment randomly assigned microfinance clients to a monthly or a traditional weekly installment schedule (N = 200). We used cell phones to gather survey data on income, expenditure, and financial stress every 48 hours over seven weeks. Clients repaying monthly were 51 percent less likely to report feeling “worried, tense, or anxious” about repaying, were 54 percent more likely to report feeling confident about repaying, and reported spending less time thinking about their loan compared to weekly clients. Monthly clients also reported higher business investment and income, suggesting that the flexibility encouraged them to invest their loans more profitably, which ultimately reduced financial stress.

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