Economics Seminar - Bank Account Ownership and Women’s Empowerment in India

Bank accounts are an entry point to formal savings and credit in several countries and a popular tool to lift households out of poverty. However, do policies increasing account ownership improve control over money and empowerment of all groups equally? In 2014, the Government of India implemented a policy removing service costs of bank account ownership that increased the demand for these accounts. This paper exploits the sharp timing of the policy to estimate how account ownership affects married women's empowerment using quasi-experimental identification strategies. Women's account ownership in response to the policy caused households to switch out of saving in microfinance platforms to larger, formal institutions; increase uptake of formal credit and reduce consumption. Prior to policy implementation, account ownership in a district was positively correlated with the level of banking infrastructure and, consistent with its goals, the policy led to faster growth in accounts in districts with lower banking infrastructure. I leverage the spatial variation in account ownership across districts to tests effects on women's self-reported measures of empowerment. There are no aggregate improvements in women's participation in decisions of household resource allocation in districts where the policy had a higher impact relative to others but there are positive heterogeneous effects based on higher trust in banking institutions. This paper provides evidence on the limited impact of gender-neutral policies improving asset ownership on women's empowerment in the absence of adequate measures to support women's access to these services.