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(Joint) Bank Savings, Female Empowerment, and Child Labor in Rural Ethiopia

Published by Oxford University Press on behalf of the World Bank

🛡CC BY 3.0 IGOPermitted use with attribution

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Abstract

This study examines whether the random allocation of single and joint savings accounts to cash crop farmers in rural Ethiopia is associated with increased savings and changes in decision-making authority and control over resources that could ultimately affect child labor and schooling resource allocations. Consistent with posited channels of intrahousehold bargaining models, women from households assigned to the joint saving treatment group show significant gains in autonomy and control of savings resources, broader financial empowerment, and increased labor participation. Positive effects on school participation and attendance are reported for girls, although point estimates are measured imprecisely. In a setting where schooling and child labor are not mutually exclusive, children work more when joint deposit accounts are available. In the absence of impacts on household income, this increase in child labor is explained by complementarities between adult farm labor and child labor in the household production function, which is reinforced by lumpy investments in labor-intensive agricultural inputs that likely increased the opportunity costs of children’s time.

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