TY - UNPB
T1 - The Impact of Micro-credit on Employment
T2 - Evidence from Bangladesh and Pakistan
AU - Khan, Azhar
AU - Rahman, Twyeafur
AU - Wright, Robert E.
PY - 2016/7/21
Y1 - 2016/7/21
N2 - This paper examines the impact of micro-credit on employment. Household-level data was collected, following a quasi-experimental design, in Bangladesh and Pakistan. Three borrower groups are compared: Current borrowers; Pipeline borrowers and Non-borrowers. Pipeline borrowers are included to control for self-selection effects. It is argued that microcredit causes a substitution of employment away from employment-for-pay to selfemployment. Therefore, the effect on total employment is ambiguous. OLS and fixed effects regression are used to examine separately self-employment and employment-for-pay between three groups of borrowers. For Pakistan, there is no evidence that micro-credit effects employment. However, for Bangladesh, there is robust evidence consistent with this hypothesis.
AB - This paper examines the impact of micro-credit on employment. Household-level data was collected, following a quasi-experimental design, in Bangladesh and Pakistan. Three borrower groups are compared: Current borrowers; Pipeline borrowers and Non-borrowers. Pipeline borrowers are included to control for self-selection effects. It is argued that microcredit causes a substitution of employment away from employment-for-pay to selfemployment. Therefore, the effect on total employment is ambiguous. OLS and fixed effects regression are used to examine separately self-employment and employment-for-pay between three groups of borrowers. For Pakistan, there is no evidence that micro-credit effects employment. However, for Bangladesh, there is robust evidence consistent with this hypothesis.
KW - micro-credit
KW - poverty
KW - self-employment
UR - http://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/16-10_combined.pdf
M3 - Discussion paper
VL - 16-10
BT - The Impact of Micro-credit on Employment
CY - Glasgow
ER -