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The Microcredit Puzzle: Labour Supply Behaviour of Rural Households in Bangladesh

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  • Asadul Islam
  • Debayan Pakrashi

Abstract

Using a unique panel dataset collected from rural households in Bangladesh, we examine the role of microcredit in the intra-household and inter-sectoral distribution of labour supply. The data also enables us to discuss seasonality in labour supply. We find robust evidence that the effects of microcredit on labour supply are not symmetrical across occupations and genders and access to microcredit could not smooth out the seasonality in the labour supply. The overall results suggest that opportunities for diversification into market oriented activities remain limited, even when an access to microcredit relaxes the financial constraints faced by households in rural Bangladesh.

Suggested Citation

  • Asadul Islam & Debayan Pakrashi, 2014. "The Microcredit Puzzle: Labour Supply Behaviour of Rural Households in Bangladesh," Monash Economics Working Papers 24-14, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2014-24
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2014/2414microcreditislampakrashi.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    microcredit; labour supply; intra-household; seasonality.;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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