Publication: Taking Control: How Financial Inclusion Impacts Labor Supply
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2023-07-13
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2023-07-13
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Social and familial financial transfers are common in low-income communities and have positive social effects. To address this challenge, the authors designed and implemented a financial innovation to lower redistributive pressure among female cashew-processing workers: a blocked savings account into which gains in workers’ earnings get transferred. Take-up of the private account was substantially higher at 60 percent, compared to 14 percent for the non-private account. Being offered a private account increased workers’ attendance by 9.7 percent and earnings by 11.4 percent. The estimates imply that workers face a 9-23 percent social tax rate, and that the welfare benefits of informal redistribution may come at the cost of depressing labor supply and productivity.
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“Carranza, Eliana; Donald, Aletheia; Grosset, Florian; Kaur, Supreet. 2023. Taking Control: How Financial Inclusion Impacts Labor Supply. Gender Innovation Lab; June 2023. © World Bank. http://hdl.handle.net/10986/39996 License: CC BY-NC 3.0 IGO.”
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