Aspirations of Filipino Women Entrepreneurs in the Informal Economy

Motivation

• “I just want to have food on the table when I come back from school”

A little boy from Bagak, Bataan

• “I want my son to become an engineer”A parent from San Pedro, Laguna

• “My teachers are my problems”A secondary dropout from Samar

Aspiration defined

synonyms: desire, hope, longing, yearning, hankering, urge, wish;

aspirationaspəˈreɪʃ(ə)n/nounplural noun: aspirations

a hope or ambition of achieving something. (Oxford English Dictionary 1989) "the needs and aspirations of the people"

To aspire means “to seek to attain or accomplish a particular goal” (Merriam-Webster 2012)

Aspiration-failure-theory

• a lack of proactive behavior to better one’s future can in part be explained by constraints faced in the process of forming aspirations

• The aspiration failure framework attempts to explain why some poorer populations tend to invest less in their own future, despite important potential returns. This lack of investment can in turn be used to explain lack of information, market failures, and low private appropriation of returns, as well as identity issues and psychological factors

Aspiration window

Aspiration leveland gap

Aspiration failure

Aspired

Gap

Efforts to improve

Current

Well-being

Perspectives

Pessimism vs. Aspirations Failure

,

influenced by the size and composition of one’s social network

Objectives• To understand the aspirations of women entrepreneurs in the

informal sector • To measure differences in entrepreneurial attitudes activity and

aspirations among women in the informal sector• To study the consequences for entrepreneurial-oriented

behaviour of women (i.e.to invest in income-generating activities) that is linked to the level of aspirations

• To determine the relationship of the aspirations of women and the different developmental areas including poverty reduction, investment patterns and socio-economic transformation

Research Questions• Are there differences in entrepreneurial attitudes, activity and

aspirations among women entrepreneurs in the informal sector?• Is the aspiration index proposed in this study reliable and valid

in measuring the level of aspirations?• What is the role played by aspirations in shaping entrepreneur-

oriented behavior of women in the informal sector?• Is there a relationship between aspiration formation and rates of

return to investment?• Is poverty affected by low levels of aspiration, i.e., do high

aspirations reduce poverty?

Background and Introduction

• Engaged in the production of goods and supply of services and can be household unincorporated enterprises etc.

• Sub-sectors, among others: micro-entrepreneurs, home-based workers, vendors, small transport operators, petty retailers, barter traders, small-scale miners etc.

• Informal sector provides 89% of total employment (NSCB, 2013)

Filipino Em-ployment in Dif-

ferent Sectors

Informal SectorFormal Sector

Informal Sector of the Economy

Background and Introduction

• 33% in the informal sector are women (NSCB, 2013)

• Exposure to low, irregular income and wages, and poor working conditions

• Have very limited access to financing, especially formal bank credit and high fixed-cost of credit providers

• Understanding the aspirations that women entrepreneurs have is of crucial importance to designing policies in developmental areas

• Aspiration formation can help particularly in the informal sector, and aid in enhancing programs that stimulate depth of entrepreneurial activity.

Women Aspiration in the Informal Sector

Informal Sector

Women

Men

Data and Methodology• CBMS (2011) data as baseline data in profiling • Randomly sampled women entrepreneurs drawn from the CBMS

sample in Tanauan, Batangas, one of provinces in CALABARZON, where we can find 12% of the total labor force involved in the informal sector, either self-employed or operators of own business

• For the pilot, five barangays were randomly sampled: Boot, Hidalgo, Janopol Oriental, Pantay Matanda, and Laurel.

• Ten female household heads were randomly selected in each barangay• wholesale/retail trade related workers, housewives• 45-63 years old• Educational attainment: Elementary graduate – 1st year high school

Data and Survey

Data and Methodology

• Instrument covering six dimensions (income, assets, education, children’s education, social benefits and social status) aggregated with individual-specific weights to come up with an aspiration index

• Perceived minimum and maximum level and the present status of this six dimensions.

• Two rounds of the survey three weeks apart using the same questionnaires

• Capacity of the proposed aspiration index to predict entrepreneur-oriented behaviour will be investigated.

• Reliability of the instrument will also be assessed variation in enumerators’ experience, change of mood of respondent

Survey Instrument

𝐴𝑖 = ൬𝑎𝑖𝑘 −𝜇𝑘𝜌𝑘 ൰𝑤𝑖𝑘𝑘

• i = respondent• k = dimension (income, assets, education,

children’s education, social benefits and social status)

• 𝑎𝑖𝑘 = individual’s response on aspiration question

• 𝑤 𝑖𝑘= weight assigned by respondent• 𝜇𝑘 = sample mean for the responses• ρ =𝑘 standard deviation for the responses

Sample questions

  Income   ` A 1What is the maximum level of income that one can have in your community?                       2What is the minimum level of income that one can have in your community?                       B 1What is the level of income that you have at present? Please describe.                       2How do you rate in numerical rating your income at the present? (From a scale

of 1 to 10 with the minimum level 1 and the maximum level 10 as identified by the respondent in set question A)    

    1 2 3 4 5 6 7 8 9 10 

 C. 1What is the level of income that you would like to achieve in your life? Please

describe                       2How do you rate in numerical rating the income you like to achieve in your

life? (From a scale of 1 to 10 with the minimum level 1 and the maximum level 10 as identified by the respondent in set question A)    

    1 2 3 4 5 6 7 8 9 10

weighting each dimension according to the value they attach to it.

"Now I would like you to tell me which of these dimensions are the most important to you. Here are 30 coins. Please distribute all 30 coins across the K aspects that we have discussed, according to their importance. No coin in a category means that you do not attach any importance to it. Many coins in a category mean that you attach a high importance to it.”

Dimensions No. of CoinsIncome  Assets  

Education  Children's Education  

Social Benefits  Social Status  

capacity of the proposed aspiration index to predict entrepreneur-oriented behavior

  “A bank representative came to you and offered to lend you any amount of money you ask … "

   

1How much would you ask for if the loan were payable in 6 months?

         

2How much would you ask for if the loan were payable in 1 year?

         

3How much would you ask for if the loan were payable in 5 years?

         

4How much would you ask for if the loan were payable in 10 years? “

         

5What type of investment would you make if you were given the loan?

         

individual’s potential demand for credit to invest in family business; short-run vs long-run investments

Follow-up question on “what type of investment would you make if you are given the loan?’

Testing for relaiability, usability, and validity

• 1. Usability—Can the instrument be administered within standard surveys? Are respondents willing to answer such questions?

• 2. Reliability—Can the instrument be trusted to provide consistent measures of aspiration on repeated applications? To what extent are the obtained answers conditioned by enumerators’ capacities, the questionnaire design, or both?

• 3. Validity—Is the instrument effectively measuring only aspirations? Are the obtained responses in line with expected determinants of aspirations and corresponding future-oriented behavior?

Challenges

• Finding at least one other female household, a peer of the respondent in the same barangay with the same age group and similar level of education

• recording of present mood (from being depressed to very good mood) and perceptions of respondent at the time of interview

• Tests for reliability and validity requires administering the same questionnaire to the same respondents 3 weeks after the first interview (test-rest procedure, and with and without change of enumerator)

• Anchoring issues with peer

Step 1: Correlations – an aspiration module was added to the CBMS questionnaire

Step 2: Measurement--An instrument was specifically designed to measure various dimensions of individual-level aspirations and aggregate them altogether.

Step 3: TreatmentStep 4: Experiment

Step 5: Replications

Research study

Baseline survey (Aspiration and CBMS)

Treatment

3 types of treatment• Documentary • Placebo • Control

2 levels of treatment• Village-level• Household-level

Follow-up survey ( ∆ Aspiration and ∆ CBMS)

Thank you