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Female Empowerment: Impact of a Commitment Savings Product in the Philippines - Working Paper 106

1/29/07
Dean Karlan, Nava Ashraf, and Wesley Yin
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Women's empowerment has become increasingly important to development goals, both as an end in itself and as a means to achieving other development goals. Microfinance is often viewed, though not without controversy, as a tool for empowering women. A growing body of literature finds that increases in a woman's share of household income leads to increases in resources that reflect the woman's preferences including education, housing and nutrition for the children. However, there is no proof that increasing a woman's share of income also improves her household status, thereby affecting whether or not her preferences are taken into account. In this working paper CGD non-resident fellow Dean Karlan designed and implemented a commitment savings product, a personal "commitment" account at a local bank, to restrict access to account funds. These accounts had a defined "date" and "amount" that had to be met before funds could be withdrawn. According to his findings, after one year individuals in the product group increased savings by 81% relative to the control group. After two and a half years, decision making power for women increased and prior household saving did not decrease. This paper is one in a series of six CGD working papers by Dean Karlan on various aspects of microfinance (Working Paper Nos. 106-111).