Women Are More Responsible With Money, Studies Show

By Derek Thompson

Girls, next time your husband or brother makes fun of you for shopping, hit them with some knowledge. Study after study, from Bangladesh to Haiti, from South Africa to the United States, shows that when women have control household spending, the money goes toward more family-targeted goods. Women pay back loans faster, and they share money within the family more fairly.

In Bangladesh, Nobel Prize-winner Muhammad Yunus, creator of the micro-credit phenomenon, has found that women not only repay loans more often than men, but that when women control the money, their families were more likely to benefit from the income.

And a study in the Philippines reported that when women have control over a couple's savings accounts, expenditures shift towards the purchase of family-targeted durable goods, such as washing machines or kitchen appliances.

Last year, for instance, Haitian authorities distributed food vouchers only to women in the aftermath of the devastating earthquake. They said the food would be more likely to be divided equitably within the household this way than if men got the vouchers. And Oportunidades, Mexico's innovative anti-poverty program, successfully targets its cash transfers to mothers, conditional on their children's school attendance and health clinic visits by family members. Follow-up studies find that the money usually goes for food, children's clothes and school supplies.

The pattern seems to transcend generations. A study by MIT economist Esther Duflo finds similar results comparing South African grandmothers' and grandfathers' usage of their old-age pension funds. And it's not just a peculiar feature of developing economies. Sociologist Catherine Kenney reports that in low- to moderate-income two-parent U.S. households, children are less likely to experience food insecurity when their parents' pooled income is controlled by their mother rather than their father.

Women-centered poverty policies aren't a new idea, but the growing body of evidence suggests that they're really quite prudent. Read the full story at WSJ.

This article available online at:

http://www.theatlantic.com/business/archive/2011/01/women-are-more-responsible-with-money-studies-show/70539/