This article reviews the empirical evidence on the effectiveness of actions that have direct, near-term impacts on women’s economic outcomes, while recognizing the importance of complementary investments in women’s human capital and inclusive policies and legal frameworks over the long term. The interventions covered in this review include providing women with access to capital (loans and grants) and with savings accounts, business management training, on-the-job and skills training, and job vouchers. The review asks “what works” to increase women’s productivity and earnings as proxies for economic empowerment, and “for whom”?
Key findings:
- Capital alone, as a small cash loan or grant, is not sufficient to grow women-owned subsistence-level firms. However, it can work if it is delivered in-kind to more successful women microentrepreneurs, and it should boost the performance of women’s larger-sized SMEs.
- Very poor women need a more intensive package of services than do less poor women to break out of subsistence production and grow their businesses.
- What works for young women (aged 15-24, or older in post-conflict settings) does not necessarily work for adult women (aged 25-64). Skills training, job search assistance, internships, and wage subsidies increase the employment levels of adult women but do not raise wages. However, similar interventions increase young women’s employability and earnings if social restrictions are not binding.
- Women who run subsistence-level firms face additional social constraints (e.g. pressure to divest some of the windfall cash from loans or grants to relatives or household expenses) when compared to similar men. This can explain the differences in the outcomes of some loans, grants, and training interventions that favour men. Social constraints may also play a role in explaining women’s outcome gains that are short-lived or emerge with a delay.
- However, many of the additional constraints that women face can be overcome by simple, inexpensive adjustments in programme design that lessen family and social pressures. These include providing capital in-kind or transacted through the privacy of a mobile phone, and providing secure savings accounts to nudge women to keep the money in the business rather than to divert it to non-business uses.
