Trapped by the lack of control over savings:Evidence from Pakistan

Gender discrimination and associated social norms are important contributing factors tothe high frequency of women trapped in poverty – particularly in developing countries.Financial inclusion, especially access to formal saving services, has recently receivedmuch attention from the development community for its potential to lift women outof poverty and reduce inequality. To date, however, the impacts of social normson women’s ability to use and benefit from such formal saving services are notwidely understood. The purpose of this paper is to advance the understanding ofthis relationship, by investigating, in a setting where social norms put women at adisadvantage, the association between their decision-making power with respect toa newly opened formal savings account at a bank and the amount of savings kept inthat account. We use data on 1,798 married women in Pakistan, from an interventionto encourage savings account uptake among them. Focusing on the usage, 8 monthsafter the intervention, of 512 newly opened bank accounts, we find that women withat least joint control over the bank account save statistically significantly more in thisaccount than women without any control. On average, this difference amounts to 2,339PKR (22.40 USD), which is substantial considering that the majority of women in oursample are from lower-middle income class households and are rarely the household’smain income earners. This finding has important implications for future research, as wellas for policy makers and practitioners providing financial services to women in genderunequal contexts