# **1. Introduction**

Women’s empowerment is now widely accepted as an objective having social, moral, political, and economic benefits. Enshrined in the recently adopted Sustainable Development Goals, (SDGs), most nations of the world have committed publicly to taking steps to advance this agenda through changes in discriminatory laws and by supporting changes in behavior, including those which affect economic opportunities and outcomes. Most countries measure a lack of empowerment for women through either (i) inequality of market participation (e.g. occupational/sectoral segregation, or lack of access to credit); or (ii) inequality of market outcomes (e.g. lower women’s wages relative to men’s). Yet economic empowerment is much more. It is also about the economic capabilities and behaviors of women and girls within households, communities, and societies, and it is shaped by the institutions which govern these. It includes not only what women do, but what women aspire to do. While this broader concept of economic empowerment is also widely recognized, experience in measuring it quantitatively, and in a way which could be compared within and across countries is limited.

This paper aims to contribute to a more complete measure of women’s economic empowerment. It starts by reviewing how the concept of empowerment, including women’s empowerment, is used in several social science disciplines. Although different disciplines assign different meanings, a number of common elements are usually present. The paper then reviews how empowerment has been incorporated into the literature of economic development, utilizing the lens of behavioral economics, a subdiscipline which attempts to marry psychology and economics to study how individuals, households and communities develop and modify economic behavior. Behavioral economics is helpful because it makes explicit the human psychology assumptions of microeconomics and the associated toolkits. Behavioral economics is also known for extensive use of experimental evaluation research, and the paper finds that this type of research has confirmed the necessity of an empowered state of mind in economic decisions to achieve individual and household development outcomes, especially lower poverty.

Next, the specific conceptualization and measurement of women’s empowerment in the domain of development economic policy and projects is discussed. It is noted that some development policy interventions (e.g. group savings and lending, job training and placement, etc.) claim effectiveness because they empower women, so it is important to check on this causal relationship. Despite widespread agreement on a broad definition, encompassing capabilities and behaviors, survey-based measurement of economic empowerment outcomes in the program/project evaluation literature has almost always resorted to measuring market participation and the role women say they have in household expenditure decisions. Yet available evidence throws significant doubt on whether these two outcomes are linked. And there is almost no research on how these dimensions of economic empowerment are related to other economic attitudes and behaviors. Finally, there is little research on whether empowerment in the economic domain can be separated from empowerment in other domains (e.g. social or political), including whether empowerment in one domain leads to another.

The paper argues that because the attitude of empowerment is important to, and indeed often assumed in microeconomic and development economic literature, it is important to check and see if it is indeed present and undergirding the economic behavior often recognized as empowered, such as participation in the labor market or participating in household economic decisions. This suggests that in measuring women’s economic empowerment, especially in the experimental evaluation literature, it may not be 2