The impact of women's participation in rural credit programs in Bangladesh on the allocation of resources towards their own health

Within the overall aim of poverty alleviation, development efforts have included credit and self-employment programs. In Bangladesh, the major beneficiaries of such group-based credit programs are rural women who use the loans to initiate small informal income generating activities. These programs find strong justification in their enhancement of household income and support of women's roles as caretakers of their families' needs. Using data from a sample of 1798 households from rural Bangladesh, conducted in 1991-92, through repeated random sampling of 87 districts covered by Grameen Bank, BRAC and BRDB, this dissertation addresses the following question: does women's participation in credit programs significantly affect her ability to secure quality health care, maternal care and contraception for herself! A non-unitary household preference model is suggested to test the hypothesis that woman's participation, contributing to an independent source of earning and savings, is an indicator of her empowerment. I hypothesize that women's empowerment through participation results in greater control, and thus improved allocation of resources for their own health outcomes. This dissertation addresses the selection bias that is encountered in program impact literature. The problem of endogeneity is attenuated by the quasi-experimental design of the study. The analysis also controls for endogeneity due to selection bias and other unobserved village level factors through use of weighted two stage instrumental variable approach with village level fixed effects. The outcomes examined are women's demand for quality health care, decision to seek assistance from trained birth attendants and use of contraception. The findings indicate a positive impact of women's participation in credit programs on their demand for quality health care which operates through their control over resources. There is also a positive effect on demand for quality health of all adults of having a female participant in the household. There is no effect of male participation in credit programs on their demand for quality health care. Women who participate in credit programs are more likely to seek assistance from trained birth attendants for childbirth although this effect does not operate through women's higher control over resources. There is no effect of women's participation in credit programs on their decision to use contraception. The naive estimates, of not controlling for the selection bias, show positive and significant impact of program participation on women's use of contraceptives. This finding illustrates the importance of controlling for selection bias and testing for endogeneity. Additionally for all three outcomes, the village level status variables are critical determinants of women's health seeking, maternal health care and contraceptive use. The policy simulations on the results of this study highlight the importance of credit programs as a health intervention in addition to being a mechanism for women's economic empowerment.