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Labor Market Effects of Improved Access to Credit Among the Poor: Evidence from Cape Verde

46 Pages Posted: 10 Feb 2015  

Paolo Casini

KU Leuven

Olivia Riera

University of Leuven – LICOS Center for Institutions and Economic Performance

Paulo Santos Monteiro

University of York - Department of Economics and Related Studies

Date Written: December 17, 2014

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

JEL Classification: D13; D14; J20; O11; O12

Suggested Citation

Casini, Paolo and Riera, Olivia and Santos Monteiro, Paulo, Labor Market Effects of Improved Access to Credit Among the Poor: Evidence from Cape Verde (December 17, 2014). Available at SSRN: https://ssrn.com/abstract=2562844 or http://dx.doi.org/10.2139/ssrn.2562844

Paolo Casini (Contact Author)

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Olivia Riera

University of Leuven – LICOS Center for Institutions and Economic Performance ( email )

Waaistraat 6 - box 3511
Leuven, 3000
Belgium

Paulo Santos Monteiro

University of York - Department of Economics and Related Studies ( email )

Heslington
York, YO1 5DD
United Kingdom

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