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Empowering Women with Micro Finance: Evidence from Bangladesh

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  • Pitt, Mark M
  • Khandker, Shahidur R
  • Cartwright, Jennifer

Abstract

This article examines the effects of men's and women's participation in micro credit programs on various indicators of women's empowerment using data from a special survey carried out in rural Bangladesh. These credit programs are well suited to studying how gender-specific resources alter intrahousehold allocations because they induce differential participation by gender through the requirement that only one adult member per household can participate in any micro credit program. Empowerment is formalized as an unobserved latent variable reflecting common components of qualitative responses to a large set of questions pertaining to women's autonomy and decision-making power. The empirical methods are attentive to various sources of endogeneity, and the results are consistent with the view that women's participation in micro credit programs helps to increase women's empowerment. The effects of male credit on women's empowerment were generally negative.

Suggested Citation

  • Pitt, Mark M & Khandker, Shahidur R & Cartwright, Jennifer, 2006. "Empowering Women with Micro Finance: Evidence from Bangladesh," Economic Development and Cultural Change, University of Chicago Press, vol. 54(4), pages 791-831, July.
    • Handle: RePEc:ucp:ecdecc:y:2006:v:54:i:4:p:791-831
    DOI: 10.1086/503580
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    References listed on IDEAS

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    1. Mark M. Pitt & Shahidur R. Khandker & Omar Haider Chowdhury & Daniel L. Millimet, 2003. "Credit Programs for the Poor And the Health Status of Children in Rural Bangladesh," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(1), pages 87-118, February.
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    3. Goetz, Anne Marie & Gupta, Rina Sen, 1996. "Who takes the credit? Gender, power, and control over loan use in rural credit programs in Bangladesh," World Development, Elsevier, vol. 24(1), pages 45-63, January.
    4. Mark Pin & Shahidur Khandker & Signe-Mary Mckernan & M. Latif, 1999. "Credit programs for the poor and reproductive behavior in low-income countries: Are the reported causal relationships the result of heterogeneity bias?," Demography, Springer;Population Association of America (PAA), vol. 36(1), pages 1-21, February.
    5. Jason Abrevaya & Jerry A. Hausman, 2004. "Response error in a transformation model with an application to earnings-equation estimation *," Econometrics Journal, Royal Economic Society, vol. 7(2), pages 366-388, December.
    6. Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
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