Women Pay More and Get Less: Experiences from Malawi

Here on the FAI blog we’ve written many posts  on the shortcomings of financial literacy training programs, both in the US and abroad. When I came across a study from the World Bank’s Development Research Group evaluating a vocational training and entrepreneurship program in Malawi, I was prepared to add this to the stack of mounting evidence of training programs that show little to no effect on business development and personal finance and move on. But in this case, the study focuses on the gendered differences of participation in the training course, not just whether or not it was effective at facilitating new business activity.

Like previous research, the Malawi study found no effects on self-employment*, but it did find significant differences in satisfaction and self-esteem between women and men after taking part in the program. The authors (Cho et al.) comment, “these differences are explained by both the conditions under which women participate in training, as well as gender differences in the training experience."

So how did the experience of female students differ from that of their male counterparts in Malawi?  Women in the sample came from households with more dependent children, spent twice as much time on agricultural chores, and were less likely to have attended secondary school than their male peers in the study. After beginning the training, women were more likely to drop out and also more likely to cite “family obligations” as a reason for doing so. They were more likely to stay enrolled in the course when other opportunities like paid labor disappeared, which may suggest that women attended the course less because they wanted that training specifically and more because they lacked other opportunities.

Both male and female participants received a stipend, but it was not enough to cover the costs of room and board. As a result, trainees had to supplement the stipend with their own savings, and women saw a greater decline in their accounts. Lastly, the trainers were more likely to offer male trainees paid work after the training and were 20% more likely to give them extra funding or food to make up for the gap between the stipend and expenses. It might not be a surprise then that men reported higher levels of satisfaction and self-esteem at the end of the program. But what explains these differences? The authors conclude that women "operate in a more constrained environment" – when it comes to financial resources, family obligations, income-earning opportunities, societal expectations of marriage, or simply available time. 

This study is a good reminder that experimental treatments that depend on teachers and students do not happen in a vacuum.  Students’ gender, literacy level and home life impact the experience of participants, which in turn affects the efficacy of the program.  (I am reminded of Nathan Fiala’s recent work on business training in Uganda, which showed women were less likely to retain any profits because of pressure to provide monetary gifts to their social networks, a constraint not felt by the men.)  In turn, what happens in the classroom (which includes everything from the language of the course to the gender of the instructor) impacts not only the results of the study but can create different outcomes for subgroups of participants (in this case, women).

As we try to solve the mystery of how to deliver effective interventions designed to spur economic activity (whether training-based or otherwise), it’s important to not only ask “does this have an impact?” but does this have an impact for a particular group (women, men, the ultra-poor, etc.)? Understanding the experience of participants in order to recognize the constraints of different populations is a good first step when designing interventions intended to provide economic opportunities to those groups.

*The authors caveat that while they conducted follow-up surveys four months from the end of the training program (on average), impacts on business or labor activities may emerge over a longer time frame.