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Labor market effects of improved access to credit among the poor: evidence from Cape Verde

Paolo Casini, Olivia Riera and Paulo Santos Monteiro ()

No 484951, Working Papers of LICOS - Centre for Institutions and Economic Performance from KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance

Abstract: In the context of a collective household choice model, we show that the effects of improved credit access on search intensity by the unemployed are heterogeneous across households and dependent on the within-household bargaining power of the unemployed. We find empirical support for the predictions of our model using a household survey conducted by the authors in Cape Verde. These findings have important implications for the optimal design of microfinance programs, in particular concerning the targeting of loans and the use of microfinance as an instrument to support improved labor market outcomes.

Keywords: Microfinance; Bargaining power; Collective Household; Job search (search for similar items in EconPapers)
Date: 2014-12-17
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Published in LICOS - Discussion paper series 362/2015 , pages 1-46

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