Do Traditional Institutions Constrain Female Entrepreneurship? A Field Experiment on Business Training in India
This paper examines how restrictions imposed by traditional religious and caste institutions in India influence women’s business activity.
The paper is based on an experiment where a sample of poor self-employed women were trained in financial literacy and business skills, and encouraged to identify financial goals. While the sample was homogenous in terms of socioeconomic status, they had different restrictions on mobility and social interactions owing to differences in caste and religion.
The experiment revealed that training increased borrowing and business income for upper caste (UC) Hindu women, while it had no significant effects on Muslim and scheduled caste (SC) women. The paper identifies the following possible reasons for this pattern:
- Higher program adoption among SCs;
- Training helped UC women overcome knowledge deficits and restrictive social norms;
- Possibility of religious discrimination;
- Women subjected to extreme restrictions may not be empowered by training to avail of business opportunities.