The impact of a gender and business training on income hiding: An experimental study in Vietnam

Professor

Erwin Bulte

(He/Him)

Professor

Faculty of Social Sciences

Wageningen University & Research

Economist interested in economic development and sustainable resource management, and often using experimental approaches for causal inference.
Dutch

Overview

An experiment within an experiment. A randomised controlled trial determines whether women received training or not, both groups of women played lab games for real money, which were used to measure the extent to which they would hide income from their husbands. 

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Key Findings

In Vietnam, we documented extremely high degrees of honesty/transparency among spousal partners.
Across the board, people are honest and are willing to incur individual costs so they can maintain transparency with their partners.
The business and gender training intervention reduces honesty, women who participated in the training were less likely to be honest and more likely to hide part of their income from their husband. These women had to be offered a greater sum to reveal their income earned in an experimental game.

    How to apply research

    It is good to invite husbands to training interventions to demystify the process. Husbands also have useful content contributions, they can provide information and networks, which can improve the working of interventions. However, it is good not to have husbands involved in specific sessions involving the business of their partner. Women prefer to keep some information (e.g. about their income) private.
    There is an ambiguity that arises with empowerment, which can appear in various contexts, when husbands have also have a say in decisions. It is important to consider how this ambiguity presents itself. In this case it is whether empowerment encourages or discourages income hiding. 
    When trying to measure income, for example to indicate which households qualify for receiving a treatment, be aware of the fact that sizeable shares of income may be hidden from view so that you may underestimate true household income.
    This research can also be applied to the domain of microfinance. Microfinance organisations often offer trainings at the exclusion of husbands, this has sometimes resulted in intrahousehold friction/tensions. Consequently, there has been a call to include husbands but this research highlights the need to be careful in its organisation. Inviting men so that they can access microfinance independently can be a means to reduce tensions, but inviting men and women together and revealing information about the workings/profitability of each partner, then you can put information on the table which might have been preferred to keep secret, thus altering power dynamics.

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      About this research

      This Journal Article was part of a collaborative effort

      Funding was received by 3ie – International Initiative for Impact Evaluation

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      About this research

      Funding was received by 3ie – International Initiative for Impact Evaluation

      This paper was co-authored

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      What findings means

      These actions reflect an income effect. After participating in the business training, women on average earn a higher income from their business. Husbands who are aware of the income increase try to “tax” some of this extra income for household purposes. In response, women try to hide part of their income, so that they can spend it privately.

      This interpretation follows a former mathematical model which predicts these results, however the findings rest on assumptions as it is not possible to measure all interactions.

      Methodology

      Purely experimental, the study was composed of a randomised control trial and field games. All results are based on the interconnection between the two experiments.

      However, the sample is small, only 350 women chosen out of the larger sample. So it is not possible to isolate the specific mechanism that triggers income hiding, aspects such as taxation by the members of the household were not measured.    

      Glossary

      Income Hiding
      The willingness of spouses (male or female) to keep money private even if income hiding implies a monetary cost. 
      Women’s Empowerment
      The extent to which empowerment affects income hiding

      Share these insights

      The full paper is not available open access

      Bulte, E. Lensink, R., & Winkel, A. B. (2018). The impact of a gender and business training on income hiding: An experimental study in Vietnam. Journal of Economic Behavior & Organization148, 241–259.