EBRD Senior Research Economist J. Michelle Brock has co-written a study on gender discrimination in small business lending in Turkey


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EBRD Senior Research Economist explores gender discrimination

EBRD Senior Research Economist explores gender discrimination

 September 15, 2020

Gender discrimination is often cited as a key supply-side driver of women’s financial exclusion.

Co-written by J. Michelle Brock, a Senior Research Economist in the Office of the Chief Economist at the EBRD, the Bank has published a study which looks for gender discrimination in small business lending in Turkey.

Results from a lab-in-the-field experiment 

The study tests for the presence of gender discrimination in small business lending through a lab-in-the-field experiment with 334 Turkish loan officers.

Each officer reviews multiple loan applications in which we randomize the applicant’s gender. While unconditional approval rates are the same for male and female applicants, the study detects a more subtle form of discrimination.

According to the study, loan officers are 30 percent more likely to make loan approval conditional on the presence of a guarantor when they are presented with an application that comes from a female instead of a male entrepreneur. This gender discrimination is concentrated among young, inexperienced, and gender-biased loan officers.

Further, the study reveals that discrimination is also most pronounced for loans that perform well in real life, making it costly to the bank. It cites that experimental variation in the available applicant information does not impact lending decisions, suggesting that the nature of discrimination is implicit rather than statistical.

Leading important research on inequality at the EBRD

An an EBRD Senior Research Economist, Michelle's research focuses on social professional norms; attitudes toward risk and uncertainty; and inequality of opportunity. 

Her work on inequality of opportunity includes macroeconomic assessments of inequality of opportunity and perceptions in the transition region, as well as microeconomic projects on gender and finance.

For example, she is working on a project to study whether and how norms of gender bias against women impact lending to female firm owners in highly competitive credit markets. 

Michelle also studies how professional and social norms influence worker effort, and how non-monetary incentives can be used to complement wages. One example is a study on whether image concerns can be used to incentivize professionalism among judges in Tajikistan.

Michelle’s work contributes to the understanding of how behavioral economics operates in the real world and aims to establish links between the laboratory environment and the field.

She uses experimental economics, randomized controlled trials and household surveys for her research. 

Read the full paper here.


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