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Monzur Hossain and Hussain Samad | Published: October 19, 2020 18:45:21 | Updated: November 09, 2020 21:02:28
Photo credit: InfoRD
Bangladesh has witnessed the advent of mobile phones and their swift rise in popularity among people for the last two decades. It is undoubtedly a versatile device which is said to have transformed the lives and livelihoods of the people. Given that over 80 per cent of the population has access to mobile phones, Bangladesh holds a significantly higher mobile-penetration status compared to other lower-middle-income countries. Hence, it is widely proclaimed that the expeditious adoption of mobile phone technology has contributed relatively to the total factor productivity of the country, leading to stellar economic growth. In this context, this is the first rigorous study that attempted to capture the beneficial impact of mobile phones on household welfare and women empowerment in rural areas of Bangladesh.
The study, to analyse the impact of mobile phones on the welfare of households and the empowerment of rural women in Bangladesh, uses data from a survey of 3,500 households conducted by the Bangladesh Institute of Development Studies (BIDS) during the second half of 2016. The survey covered areas where solar mini-grid plants of the Bangladesh Infrastructure Development Company Limited (IDCOL) provide solar electricity.
The location areas of sample households are riverine and lack grid connections for their remoteness. The only means of transportation to reach the mainland are boats and trawlers due to the absence of roads and rail networks connecting to the rest of the country. However, mobile ownership was found to be over 90 per cent of all upazilas surveyed. Moreover, in some of those, the proportion even crossed 95 per cent. This number is overwhelmingly inclusive when considered by the remoteness of those areas. Ownership of mobile phones by household heads was found 77 per cent on an average. Survey data show that the primary sources of earning in those areas are farming (40 per cent), small businesses (16 per cent), salaried employment (16 per cent), and fishing (8 per cent). Mobile phones are, therefore, expected to play an important role in the livelihoods of these communication−handicapped areas.
The results suggest that at least three major channels through which mobile phones exert influence on household welfare. First, mobile phones reduce transaction costs and improve economic efficiency. It demonstrates income gain and eases the process of market information gathering. At the same time, it cuts back transaction costs by reducing the need for actual market trips to search for information. The study finds that the use of mobile phones has prompted significant benefits for households involved in non-farm businesses as income from non-farm activities, rental services, and overseas remittances is much higher among households that own a device than those who do not. Their profitability goes up by 7 to 10 per cent. Mobile phone ownership increases the likelihood of receiving income from rental services by 3.7 per cent and of making profits from fisheries by 6.9–9.8 per cent. A significant income rise of 3.8 per cent is also seen in livestock-related income.
Secondly, mobile phones pave the way for financial inclusion. Shocks, such as floods and droughts, disrupt supply chains, and thus, raise prices. These shocks hurt household consumption. Mobile Financial Service (MFS) opens the door for international remittances, and upon receiving that extra bit of income, households can enhance their consumption smoothing capabilities. The study found an increase of remittances by 3.9–5.4 per cent in households that own a mobile phone.
Moreover, in villages that suffered shocks the year before the survey, 6.6 per cent of the households whose heads own mobile phones were found to have faced food deficits. The figure is significantly higher in households without mobile phones, where 12 per cent faced the same crisis. It was revealed that in households that were subject to shocks, ownership of mobile phones increased per capita food expenditure by 3.5 per cent and lowered the probability of food deficits by 2.8 per cent.
Thirdly, mobile phones can potentially enhance information networks, and social capital as ownership of a mobile phone is considered an independent tool for accessing information. This raises the prospect of women’s agency through participation in decision making, financial independence and freedom of movement. The study finds that when the household head owns a mobile phone, women’s chance of making decisions alone on family planning goes up by 0.6-0.9 per cent while the ownership of mobile phones by the women themselves does not show any significant result. Women’s decision-making power regarding children’s health also goes up by around 5.5 per cent when a household head owns a phone. Women’s labour force participation increases by 0.8-1.1 per cent associated with mobile phone ownership by the household head. An even higher increase of 1.5 per cent in women’s employment is found when they own a mobile phone. Again, about 12 per cent of the women tend to go to the market on their own when the household head owns a mobile phone. Again, the number is only 8.0 per cent in households where the head does not have a phone.
Overall, the study finds that households in rural areas augment profits from small enterprises as their income increases by 3–10 per cent. Access to mobile phones empowers rural women in terms of their mobility to market places, decision making on shopping, children’s education and healthcare. Mobile phones also enhance the shock absorption capabilities of households with consumption-smoothing effects, which might be gained through foreign remittance or other channels facilitated by mobile phone networks.
The beneficial impacts of mobile phones, already identified in the paper, are attributed to many factors highlighted in the existing literature. For example, mobile phones are a critical factor in the improvement of agricultural productivity, education and employability, women empowerment, and financial inclusion. Mobile phones make markets more efficient by saving travel cost and time, and by enabling market agents to collect information related to price more quickly. It also reduces information searching cost in the industrial, agricultural and social sectors, which in turn improves the agricultural and labour market efficiency.
Thus, there is a need for favourable policies on investment in mobile technologies, talk time and internet tariff, and mobile financial services. All these will help reduce communication bottlenecks and digital divide in remote regions. Policymakers also need to make provisions to avoid the adverse impact of mobile phone usage for a balanced regional development through the use of information technology.
Monzur Hossain is a Research Director at Bangladesh Institute of Development Studies (BIDS).
Hussain Samad is a Senior Consultant at the World Bank, Washington, DC, USA.
The article highlights the key findings of a research paper titled “Mobile Phones, Household Welfare, and Women’s Empowerment: Evidence from Rural Off-grid Regions of Bangladesh” authored by Monzur Hossain and Hussain Samad. It was published in the journal “Information Technology for Development” on 14 September 2020.