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The Microcredit Puzzle: Labour Supply Behaviour of Rural Households in Bangladesh

Asadul Islam () and Debayan Pakrashi

No 24-14, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: Using a unique panel dataset collected from rural households in Bangladesh, we examine the role of microcredit in the intra-household and inter-sectoral distribution of labour supply. The data also enables us to discuss seasonality in labour supply. We find robust evidence that the effects of microcredit on labour supply are not symmetrical across occupations and genders and access to microcredit could not smooth out the seasonality in the labour supply. The overall results suggest that opportunities for diversification into market oriented activities remain limited, even when an access to microcredit relaxes the financial constraints faced by households in rural Bangladesh.

Keywords: microcredit; labour supply; intra-household; seasonality. (search for similar items in EconPapers)
JEL-codes: J01 J16 J22 J82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-mfd
Date: 2014-09
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