DP11554 Labor Markets and Poverty in Village Economies
We study how women’s choices over labor activities in village economies correlate with poverty
and whether enabling the poorest women to take on the activities of their richer counterparts can
set them on a sustainable trajectory out of poverty. To do this we conduct a large-scale randomized
control trial, covering over 21,000 households in 1,309 villages surveyed four times over a seven year
period, to evaluate a nationwide program in Bangladesh that transfers livestock assets and skills to
the poorest women. At baseline, the poorest women mostly engage in low return and seasonal casual
wage labor while wealthier women solely engage in livestock rearing. The program enables poor
women to start engaging in livestock rearing, increasing their aggregate labor supply and earnings.
This leads to asset accumulation (livestock, land and business assets) and poverty reduction, both
sustained after four and seven years. These gains do not crowd out the livestock businesses of noneligible
households while the wages these receive for casual jobs increase as the poor reduce their labor
supply. Our results show that: (i) the poor are able to take on the work activities of the non-poor but
face barriers to doing so, and, (ii) one-off interventions that remove these barriers lead to sustainable
poverty reduction.
