Female Empowerment: Impact of a Commitment Savings Product in the Philippines

and social setting.¹⁸ The effects of microcredit and, more generally, microfinance, which includes
savings and/or insurance products, on female empowerment remain unclear, in large part because
studies of it tend to suffer from a pronounced selection bias in the type of women who access
microcredit (Pitt, Khandker and Cartwright 2003).

Using a randomized controlled trial, we evaluate the impact of a commitment micro-savings
account. We find that the commitment product positively impacts both household decision
making power for women (i.e., the household is more likely to buy female-oriented durables),
self-perception of savings behavior (time-inconsistent females report being more disciplined
savers), as well as actual consumption decisions regarding durables goods. We also find no
evidence that this is a result of crowd-out of other savings held at the same financial institution or
elsewhere by either the individual or their spouse.

However, we do find that the strong (72%, as reported in Table 6, Column 1) impact on
savings that was observed after 12 months diminishes to 32% after 32 months (Table 6, Column
2) and is no longer statistically significant. We posit several reasons for the diminished impact of
the commitment product, which may have to do with the ease of undoing commitment over a
longer-time period—either because one returns to one’s habit (if commitment is sought for self-
control reasons) or because one’s spouse finds ways of regaining control (if commitment is
sought for spousal control reasons). In other words, perhaps the SEED account caused a
deviation from equilibrium (either in one’s own savings behavior or in the household dynamics),
and gradually, individuals and households found ways to return back to the equilibrium they were
in before. There is some qualitative evidence that this type of pressure occurred for some of the
women who were SEED clients. For instance, from these qualitative interviews with SEED

¹⁸ Recent evidence from a randomized controlled trial in South Africa finds no impact from access to credit
on household decision-making (Karlan and Zinman 2006). See Chapter 7 of Armendariz de Aghion and
Morduch (2005) for more discussion on this.

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