Trapped by the Lack of Control Over Savings: Evidence From Pakistan

Gender discrimination and associated social norms are important contributing factors to the high frequency of women trapped in poverty - particularly in developing countries. Financial inclusion, especially access to formal saving services, has recently received much attention from the development community for its potential to lift women out of poverty and reduce inequality. To date, however, the impacts of social norms on women's ability to use and benefit from such formal saving services are not widely understood. The purpose of this paper is to advance the understanding of this relationship, by investigating, in a setting where social norms put women at a disadvantage, the association between their decision-making power with respect to a newly opened formal savings account at a bank and the amount of savings kept in that account. We use data on 1,798 married women in Pakistan, from an intervention to encourage savings account uptake among them. Focusing on the usage, 8 months after the intervention, of 512 newly opened bank accounts, we find that women with at least joint control over the bank account save statistically significantly more in this account than women without any control. On average, this difference amounts to 2,339 PKR (22.40 USD), which is substantial considering that the majority of women in our sample are from lower-middle income class households and are rarely the household's main income earners. This finding has important implications for future research, as well as for policy makers and practitioners providing financial services to women in gender unequal contexts.