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.