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Unintended Effects of Microfinance: An Increase in Child Labour in Some Contexts?


  • Christian Lehmann

    () (International Policy Centre for Inclusive Growth)

  • Guilherme Issamu Hirata

    () (International Poverty Centre)


An increasing number of policies in developing countries seek to empower women through female entrepreneurship. Many microfinance institutions (MFIs), for example, lend exclusively to women. Loans are usually combined with capacity building workshops on entrepreneurial activities such as the production of handicrafts, clothes or food to be sold in local markets. While there is evidence that these strategies have been successful in empowering women (Panjaitan-Drioadisuryo and Cloud, 1999), less is known about how such an increase in mothers? non-domestic labour affects the working hours of their children. In the few available studies, the results are ambiguous: see, for example, Hazarika et al. (2007) and Dehejia and Gatti (2002). Drawing on a study of Mexico (Lehman, 2010), this One Pager points out that policies which encourage the small business activities of women may lead to an increase in child labour. It hypothesises that the provision of family and/or social support infrastructure (full-day schools and childcare facilities), and/or policies that encourage investment in the children?s future, may help mitigate these unintended impacts.

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  • Christian Lehmann & Guilherme Issamu Hirata, 2010. "Unintended Effects of Microfinance: An Increase in Child Labour in Some Contexts?," One Pager 108, International Policy Centre for Inclusive Growth.
  • Handle: RePEc:ipc:opager:108

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    References listed on IDEAS

    1. Panjaitan-Drioadisuryo, R.D.M. & Cloud, Kathleen, 1999. "Gender, self-employment and microcredit programs An Indonesian case study," The Quarterly Review of Economics and Finance, Elsevier, vol. 39(5), pages 769-779.
    2. Hazarika, Gautam & Sarangi, Sudipta, 2008. "Household Access to Microcredit and Child Work in Rural Malawi," World Development, Elsevier, vol. 36(5), pages 843-859, May.
    3. Dehejia, Rajeev H. & Gatti, Roberta, 2002. "Child labor : the role of income variability and access to credit in a cross-section of countries," Policy Research Working Paper Series 2767, The World Bank.
    4. Fabio Veras Soares & Rafael Perez Ribas & Guilherme Issamu Hirata, 2008. "Achievements and Shortfalls of Conditional Cash Transfers: Impact Evaluation of Paraguay?s Tekopor√£ Programme," Publications 3, International Policy Centre for Inclusive Growth.
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