In this paper we evaluate the impact of microcredit on indicators of
women’s empowerment in the urban slums of the Lahore district of
Pakistan. A household level instrument that contains information on
different dimensions of household decisions: child related, health, social mobility, economic and major household purchase decisions was
specifically designed and implemented to explore the link between
microcredit and women’s empowerment. After controlling for endogeneity in our estimation by using proxies for initial levels of
empowerment, matching the controls and treated units on observable
characteristics and finally instrumenting for the treatment, this paper
finds no difference between the level of empowerment of treated and
control units. Participation in the microcredit program is found to be
insignificant in explaining all the outcome indicators of empowerment
for the sampled households.
