Gender and Rural Non-Farm Entrepreneurship
- For policymakers
- Summary created: 2022
Documenting differences in productivity of female and male entrepreneurs and analysing where they stem from.
This summary, including its recommendations and ideas, was created by Bob Rijkers and is based on original research. The original research itself was conducted in collaboration with the following researcher.
The study investigates specific cases in Ethiopia, Bangladesh, Sri Lanka and Indonesia to represent gender differences in firms across developing countries.
Insights
Female-headed enterprises are much less productive on average than male-headed enterprises, but this is largely a function of sorting: Women sort into activities that are typically less productive and run firms that are less capital-intensive.
Once firm size and sector activity are accounted for, gender differences in productivity diminishes dramatically. Differences are largely a function of where women work and the type of activity they deploy.
These sorting differences are likely due to a range of factors including differences in cultural roles of men and women in these areas.
Returns to scale were not observed in these data; the key difference in productivity was the type of firm rather than the size.
Women’s economic performance is also constrained by activities in the household, for example better educated spouses appears associated with better access to capital.
Interestingly, there was little evidence that inequities in human capital were significant factors in gender productivity differences.
Gender differences were not linked to returns to scale- while male owned firms are larger, there was not strong evidence of increasing returns to larger firms with greater capital intensity.
Participation differences between men and women varied between countries studied.
Proposed action
Neutralise household differences so that women without educated husbands have similar access to capital opportunities as those who do
Work on ways to make more work activities more accessible and available to women
Liberation from domestic obligations could help women take on more lucrative work
Firm performance is very vulnerable to household shocks, so improved healthcare and targeted relief would be a significant difference-maker
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Acknowledgements
Thank you to iDE Global
These insights were made available thanks to the support of iDE Global, who are committed to the dissemination of knowledge for all.
Special thanks to Ben Levett for preparation assistance
We would like to extend a special thank you to Ben Levett, for their invaluable contribution in assisting the preparation of this research summary.
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