There’s an interesting debate between Tim Ogden and Barbara Magnoni on the usefulness of targeting women with microcredit. Ogden makes a statement which I believe deserves an enormous amount of attention:
Hereâ€™s my operating hypothesis: as family incomes rise, families invest more in all their children, boys and girls. That investment often yields much higher levels of schooling for girls which in turn increases their opportunities.
If you accept that hypothesis, it makes sense to focus on raising family incomes in the fastest way possible. That in turn suggests that we should be paying attention to what groups generate the highest returns on capital. Given the status quo, that again implies that it makes a lot of sense to provide working capital to male entrepreneursâ€”and then work with them to encourage them to invest in all of their children.
For me, thatâ€™s as plausible a path to both increasing family welfare and addressing gender imbalances as focusing microcredit outreach on women who, until you change societal norms, will likely earn very low returns on capital and raise family incomes less.
Basically, Ogden is arguing that growth trumps redistribution, that it’s more worthwhile to push a family’s income onto a high growth path, letting individual members benefit as best they can through whatever distributional norms currently prevail, rather than change those norms to be more equitable today, but doing little to change the household’s income path.
This is pretty much the opposite conclusion that proponents of The Girl Effect have reached. It’s also one that’s barely been touched by the new wave of randomized empirics (aside from recent studies on micro-credit/micro-firm investment). Proponents would argue that what evidence we have seen suggests we should continue to err on the side of targeting women – results from studies of cash transfers suggest that women are significantly better at investing in children than men.
Yet there is already an inherent bias in the sort of interventions we undertake when we run an RCT. Donors and partner NGOs are always eager to get involved in a gender-based project, and researchers respond to these incentives. Interventions that fall under Ogden’s `invest in the man’s earning capacity’, tend to get relegated to natural experiments in the labour market, rather than outright interventions.
Maybe someday in the future we’ll be able settle this argument empirically – there is a study set to start in Ethiopia that may help answer some of these questions. I suspect the absolute gains to children in a family where the male household head gets a well-paid job are going to be massive compared to marginal gains reaped from nudging up the bargaining position of the female head.
We shouldn’t ignore the issue of bargaining power and gender equality in the household, but we need to be clearer about what our priorities are and what trade-offs we are making. Choosing higher income growth over more intrahousehold equality is a trade-off, but it might be a worthwhile one if what we really care about is absolute deprivation.