vector of the “determinants of the woman’s well-being”, **Yj** (Montgomery and Casterline, 1996, p. 157). Let _P_ ( **Yj** _|c,_ **I** ) represent the probability of the woman experiencing the vector of determinants **Yj** , which is conditional on the choice made by her, _c_ , and her information set, **I** . Then, the vector of determinants **Y1** occurs with probability _P_ ( **Y1** _|c,_ **I** ), **Y2** occurs with probability _P_ ( **Y2** _|c,_ **I** ), and so on. The vector **Yj** thus represents the outcome of the household bargain, given the components of the woman’s information set. While we do not explicitly model the household bargain here, the formulation of the optimization problem presented below is fully compatible with a standard Nash bargaining framework.

Consider a woman who gets vocational training and then chooses to become a candle maker, _cj_ . Her decision to engage in this outside employment affects the amount of her household income she controls, **Yj** , which is an outcome of her household bargain. The effect of the bargaining outcome on her individual utility is denoted by _U_ ( **Yj** ); thus, **Yj** is the outcome of the household bargain, facilitated by choice _cj_ , and is a determinant of the woman’s utility. Then, the woman’s expected utility maximization problem is given by: The woman’s information set **I** consists of: where **pt** and **qt** are known current prices and quantities of the goods and services consumed by the woman. Expected future prices and quantities, E( **pt** + **1** ) and E( **qt** + **1** ), and the expected future vector of private determinants of well-being, E( **Yt** + **1** _|c_ ), have associated variances **Σ**<sup>**2**</sup> . Vector **Z** represents all remaining constraints and costs.

By educating a woman, _Mahila Samakhya_ improves her household bargaining position and increases expected lifetime outcomes.<sup>5</sup> We can think of this education as adding a choice _cK_ +1, where _K_ + 1 _≤ N_ , to the woman’s existing choice set. For example, choice _cK_ +1 may be getting a job that would not have been feasible without the education. We assume that this choice can only be added by _Mahila Samakhya_ because there is no other opportunity for formal or vocational education.

Some women may not select the newly available choice _cK_ +1. However, the education provided by _Mahila Samakhya_ gives these women the potential to choose _cK_ +1, which increases their reservation wage and leads them to directly benefitting from the program. For example, the addition of _cK_ +1 to the womans choice set can lead to an increase in _P_ ( **Yn** _|cm,_ **I** ), where _cm_ is a choice that was available before the educational component and **Yn** is an improved outcome for the woman.

The program’s indirect effect works through spillovers from social learning and social influence, as well as social norms. Participants learn about new opportunities and new behaviors from each other, which expands each woman’s choice set and can improve her expected utility. So, while participation expands choice sets, it also changes expectations of future employment and empowerment outcomes, given the choices. Changing expectations to reduce the variance of outcomes associated with previously unknown choices can improve individuals’ expected utility. Assuming that these women are risk-averse, even if certain choices were available to them, the unknown distribution of outcomes associated with these choices might discourage them from making these choices. For

> 5Even in cases where education is an irrelevant alternative, the woman is not worse off than before, hence participation leads to a weak improvement to her household bargaining position.

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