Steve DeLoach, professor of economics, and alumna Erika Lamanna ’09 recently published a paper in the latest issue of the journal World Development.
World Development is one of the top journals in the field of international economic development, currently ranking #1 for its five-year impact factor among journals in this field (Thompson Reuters 2011).
In their article, “Measuring the Impact of Micro-finance on Child Health Outcomes in Indonesia,” the authors used data from the Indonesian Family Life Survey 1993-2000 to investigate the impact micro-finance institutions (MFIs) play in child health outcomes. Controlling for the level of local economic development as well as income within each household, DeLoach and Lamanna found that when MFIs enter a village that previously had no such banks, children grow significantly faster in terms if height than their peers in villages that do not acquire such banks. Likewise, children in villages that lost access to these MFIs (for example due to the Asian financial crisis in 1997) grew more slowly, on average.
DeLoach and Lamanna argue the most likely possible explanations for this effect are the ability of micro-credit to: (1) enhance the economic power of women, resulting in more resources being allocated to food and nutrition within the household; or (2) increase the social capital of women which may facilitate the spread of information between mothers regarding health and nutrition.
The two received support for their research from Elon’s Summer Undergraduate Research Experience, Rawls Fellowship and the Martha and Spencer Love School of Business.