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.
Gender and Rural Non-Farm Entrepreneurship
(He/Him)
The World Bank
Senior Economist at The World Bank’s Development Research Group. Working to identify policies that catalyse development.
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About
Documenting differences in productivity of female and male entrepreneurs and analysing where they stem from.
The study investigates specific cases in Ethiopia, Bangladesh, Sri Lanka and Indonesia to represent gender differences in firms across developing countries.
Key Findings
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.
How to use
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: e.g. provide support to areas where women are typically underrepresented, access to finance, etc.
Liberation from domestic obligations could help women take on more lucrative work: Through healthcare assistance and targeting perceptions on gendered care roles.
Firm performance is very vulnerable to household shocks, so improved healthcare and targeted relief would be a significant difference-maker.
Want to read the full paper? It is available open access
Rijkers, Bob and Rita Costa, ‘Gender and Rural Non-Farm Entrepreneurship’ (May 1, 2012). World Bank Policy Research Working Paper No. 6066.
About this research
The World Bank
This research was independently conducted and did not receive funding from outside of the university.
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UN Sustainable Development Goals
This research contributes to the following SDGs
About this research
The World Bank
This research was independently conducted and did not receive funding from outside of the university.
This paper was co-authored
Rita Costa
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What it means
Methodology
Surveys of non-farm enterprises in rural areas that are representative of rural areas. Information collected on women-run firms & characteristics of households. Estimated participation regressions as well as production functions to compare productivity of male and female owned firms, then calculated the impact of the variables measured (capital, work type, etc) on these differences.
However, this was an observational study, and did not test strategies to target
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Ben Levett prepared this research following an interview with Bob Rijkers.
