The Unfolding of Women’s Economic Empowerment Outcomes: Time Path of Impacts in an Indonesia Trial

This paper makes the case that some interventions designed to improve women’s economic lives need to be tracked long enough for women to manifest new and beneficial behaviors. The study analyzes the time paths of the predicted impacts in a randomized trial providing financial incentives to bank agents (on the supply-side) and basic business training to women business owners (on the demand-side) to facilitate their access to and use of formal financial services. The trial took place over a two-year period in 401 villages in five regencies of East Java province, Indonesia. Although predicted impacts of the treatments are positive and increasing over time for seven of eight economic empowerment outcomes analyzed, their time paths vary, with business profits and household income increasing sharply in the second year after increasing very little during the first year while business capital, improved business practices, personal savings and women’s agency increased linearly with time following treatment. A mediation analysis using a structural equations model finds significant direct and indirect effects between these economic empowerment-related outcomes: business practices, business capital and women’s agency contribute directly to increased business profits while personal savings, business profits itself and household income are indirect drivers; further, both treatments had a strong direct impact on household income that was reinforced by the direct effects of increased business profits. The article’s findings are consistent with other incipient evidence on the delayed effects of some interventions targeting women’s economic empowerment. They underline the need to measure impacts over a sufficiently long period, which in this case is at least two years after exposure to the treatments.