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Labor market effects of improved access to credit among the poor: evidence from Cape Verde

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  • Paolo Casini
  • Olivia Riera
  • Paulo Santos Monteiro

Abstract

In the context of a collective household choice model, we show that the effects of improved credit access on search intensity by the unemployed are heterogeneous across households and dependent on the within-household bargaining power of the unemployed. We find empirical support for the predictions of our model using a household survey conducted by the authors in Cape Verde. These findings have important implications for the optimal design of microfinance programs, in particular concerning the targeting of loans and the use of microfinance as an instrument to support improved labor market outcomes.

Suggested Citation

  • Paolo Casini & Olivia Riera & Paulo Santos Monteiro, 2014. "Labor market effects of improved access to credit among the poor: evidence from Cape Verde," Working Papers of LICOS - Centre for Institutions and Economic Performance 484951, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
  • Handle: RePEc:ete:licosp:484951
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    More about this item

    Keywords

    Microfinance; Bargaining power; Collective Household; Job search;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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