The analysis of gender effects on saving: Evidence from urban poor home -based workers in Thailand

This research investigates how low-income people, particularly informal workers in the urban areas of Bangkok, manage their monetary resources. It describes how they handle their savings and discusses the role of informal savings mechanisms available to them. The second aim is to examine why the propensities to save are different between women and men and how a change in women's bargaining power, measured by decisions over financial allocations and household consumptions, influences household savings. By using the data from the Urban Poor Home-based Worker Survey 2002 (UPHWS 2002) in Bangkok, this study provides some interesting insights on the gender effects on the level of informal savings. A number of conclusions have emerged as follows: (1) the level of informal savings is influenced by a number of factors including income, individual and household characteristics, household bargaining power, social and gender norms; (2) women and men have different propensities to save and women tend to save more than men; (3) men's and women's probability to participate in all savings institutions is different; (4) increases in women's bargaining power have a positive impact on level of household savings. Based on the individual savings models, women's and men's propensity to save may differ due to differences in their perceived interests and perceived risks, which in turn, are affected by gender norms, such as family obligations on Thai women. We first find that Thai women tend to hold higher savings. They save more than Thai men as their incomes increase because they save for children's allowances, education and other expenses, as well as for business purposes. This evidence is also confirmed by the fact that Thai women traditionally are the money-keepers who manage household savings and expenditures. Our results demonstrate the existence of this gender effects on saving patterns of both women and men. In the household bargaining analysis, various indicators of bargaining power are used to examine its impact on the level of household saving. These are: (a) women's control over financial decision (FDMI), (b) women's control over consumption decision (CDMI), and (c) economic obligation index (EOI). The most interesting finding is that an increase in FDMI (or an improvement in women's fallback position) is statistically important in raising household savings. The performance of the CDMI and EOI is less robust than the FDMI. This, however, may be viewed as an interesting field that future research could pursue, possibly by creating extended versions of the measurements of power. From a policy perspective, understanding how low-income family members or households bargain over economic resources can provide us with a better assessment of the effects of economic, social and development strategies on their saving behaviors.