Poor women in India’s villages are more likely to take up jobs if their wages can be deposited into their bank accounts and they can be trained in digital banking, a September 2019 study by the US-based National Bureau Of Economic Research has concluded. This eases patriarchal social norms and increases empowerment among the one section of Indian society with the least labour market experience, it added.
If poor, rural women can control their access to wages through bank accounts and receive adequate training for handling it, they are more likely to join or continue in the labour workforce in India, the study found. It also helped in accommodating changes in gender norms on women going to work: The study found that women who received digital deposits and training were more likely to hold female work in high regard. Although their husbands did not change their personal beliefs, they became less likely to report that husbands suffer social costs when their wives work.
Researchers used randomised control trials to study the effects of channelling women’s wages under the Mahatma Gandhi National Rural Employment Guarantee Scheme, into their individually-controlled bank accounts, and not the account of the head of their family, typically a man.
Women who received digital wage deposits as well as the training to use their bank accounts, were found to be working more, as we said earlier, in both jobs generated by MGNREGS and the private sector. This increase occurred even though the market wage remained static.
The study was conducted in collaboration with the Madhya Pradesh state government and the rural development ministry in “socially conservative” areas in the northern pockets of the state – Gwalior, Morena, Sheopur and Shivpur.
“Despite robust economic growth, the female labour force participation rate has declined from 37% in 1990 to 28% in 2015, making Indian women some of the least employed in the world,” the study noted. India’s growth trajectory and the well-being of its population, will depend on how well it uses public policy to lower barriers to female employment, it said.
Policy, when appropriately designed, can empower women in homes and even dilute common patriarchal norms, said Charity Troyer Moore, co-author of the study and director for South Asia Economics Research at The Whitney and Betty MacMillan Center for International and Area Studies at Yale University.
“By working with women to open accounts, training them on how to use the accounts, and linking those accounts to NREGS so they could receive their wages as mandated, we see important improvements in women’s financial activity, paid work, especially in the private sector, and views on women and work,” she said.
“The economic gender gap runs particularly deep in India,” the report noted. “Only one-third of the gap has been bridged. Since 2006, the gap has gotten significantly wider. Among the 153 countries studied, India is the only country where the economic gender gap [ranked 149th] is larger than the political gender gap.”
Only one-quarter of women, compared with 82% of men, engage actively in the labour market [working or looking for work] – one of the lowest participation rates in the world [145th] – and estimated female income is a mere one-fifth of male income, which is also among the world’s lowest, the report noted.
“India’s gender issue is a jobs issue – women’s overall well-being has fallen as access to work outside their homes has declined, and especially as women move out of agriculture in rural areas,” said Moore. “There is a multitude of challenges to helping women access employment, but increasing demand in sectors that suit women’s practical circumstances seems to be key here.”
Many of the policy efforts undertaken to support women focus on their specific role as a household caregiver or mother. Though important, it should not be given at the expense of other efforts, like hiring more local women to serve in frontline work to support their communities’ development, and encouraging employment for young women who are out of school and not yet married, Moore added.
The study conducted randomised control trials in 197 gram panchayats, and in 67 of these, women’s bank accounts were linked to their MGNREGS wages and provided basic financial training to ensure they understand how to use their accounts if they decided to work. The study was conducted between 2013 and 2014, prior to the start of Pradhan Mantri Jan Dhan Yojana targeting India’s unbanked population. Follow-up surveys were then conducted in 2015 and 2017.
The study then compared outcomes for women who only received only bank accounts with those who additionally received direct deposit of MGNREGS wages and bank account training – “direct deposit and training”. Low levels of engagement with the formal banking sector beyond simple withdrawals and deposits by women and marginalised communities suggest that universal account ownership does not necessarily translate to financial inclusion or the ability to use banking services effectively, IndiaSpend reported on May 17, 2018. In 2015-16, 53% of women used a bank account in their own name, according to the fourth National Family Health Survey data.
The intervention found long- and short-term benefits in the group. Three years after the intervention, women used their accounts more frequently and more women were able to go to a bank to operate their accounts.
Women living in gram panchayats where training was offered to operate bank accounts worked more, as we said earlier, than those who only had individual bank accounts opened for them. Further, the impact was more among women who had least or no work experience – in the study, those who had never worked for MGNREGS. These women have been classified as “socially constrained” to reflect that they are less likely to work, less empowered, and that their husbands are more likely to oppose female work.
The transfers to individually-controlled bank accounts empower women to assert themselves in their families, the authors surmise. “So giving a woman better ‘outside options’ to the status quo may help her bargain and assert her preferences, which can result in increased mobility,” said Moore.
Three years later, in 2017, “socially constrained women” reported an increased ability to spend and greater freedom to move about. After three years, their empowerment score was increased, “effectively closing the empowerment gap between constrained and unconstrained women”.
The study found that, compared to women who were given only bank accounts, those women who received digital deposits and training were more likely to hold female work in high regard. Although their husbands did not change their personal beliefs they became less likely to report that husbands suffer social costs when their wives work, the study reported.
Gender norms became more progressive in families where women controlled their wages, the study found. The “actual norms” – average personal beliefs about women and work – of women who received direct deposit and training were more progressive than those of women in “accounts-only” areas. Moreover, on average, the community was more accepting of working women.
Although husbands’ actual norms remained unchanged, perceived norms among men in the community were “significantly liberalised, with greater perceived acceptance of working women’s husbands, suggesting that women may in part be held back from working by men’s misperceptions of the stigma they would suffer”, the study said.
“There are signs of women’s increased decision-making and financial independence, but that does not necessarily come at a cost to men,” said Moore. “The results on decisions hinge around whether women report higher involvement in either deciding or helping decide how to spend money and whether to work outside the home – so an increase in women’s power here would not necessarily mean men’s influence declined, since they could be making more joint decisions.”
The study is significant for programmes such as MGNREGS which aim to include and empower women through employment, offering them equal wages, the study says. Policies that cause women to increase engagement with those outside their families are likely to change social norms, especially as more conservative men change their beliefs about the consequences of adopting or accommodating progressive behaviours.
“One thing our study didn’t speak to is that limited mobility also reflects individual and household concerns about safety and violence against women, which are valid concerns,” said Moore. “This is where policy can play an important role.” It can work to ensure public spaces are safe and open to both men and women, she added, to improve responsiveness to reports about harassment and violence, and to be responsive to women’s inputs on these issues.
This article first appeared on IndiaSpend, a data-driven and public-interest journalism non-profit.