WHERE DOES ‘GENDER’ MATTERIN ENTREPRENEURSHIP?Enabling Environment and Policy Reforms to Support Female Entrepreneurship

Mary Hallward-Driemeier

Chief Economist Office, FPD

Where does ‘gender’ matter in entrepreneurship?

Where do women work? What enterprises do they run?

Which dimension of IC matters most for women? Directly – as women Indirectly – where more women work Looking beyond levels of IC

Women’s entrepreneurship is high -- But concentrated in self-employment

•At low levels of income, women are disproportionately in self-employment.

• Greater relative participation of women in wage work as income rises

•Women’s share of employers remains constant • But 10 percentage

points lower than women’s share in the non-agric. labor force

Women’s share in non-agricultural employment averages 38 percent – across income levels

Source: Hallward-Driemeieret al. (2011)

Agenda is not to raise women’s entrepreneurship per se – but to help women move into higher value added activities

Definition of “female enterprise” matters

1. Participation in ownership2. Decision maker

Of those with ‘some female ownership’ – women are a main decision maker in only half

3. Sole proprietors – ownership and decision maker Choice matters:

Performance gaps using the first definition are not significant; they are using the second and third.

Property rights: especially family law Ethiopia – change of

family law raised share of women working outside the home

Access to finance Require male co-

signature Less access to

collateral Harassment – what is

asked for is not always money; ‘sextortion’

Source: Hallward-Driemeieret al. (2011)

Shares that have ‘frequently’ heard of sexual favors being raised in certain transactions

Direct impact of gender – greater IC constraints faced by women as women

Variations are greater across sectors than by gender within a sector

But women are more likely to run informal or smaller firms. Indirect gender effects.

Addressing constraints to smaller firms can disproportionately help women.

Factors affecting entry and choice of activity / formality / size of enterprise are key to explaining outcomes.

Labor ProductivityEducation of the entrepreneur

Source: Hallward-Driemeierand Gajigo(2010)

Source: Hallward-Driemeieret al. (2011)

Which dimension of the IC matters?

Most work has focused on the LEVEL of IC conditions (days or costs to get things done)

But VARIATION in the IC is also costly Introduces uncertainty that is associated with lower

investment and hiring Opens the door to more corruption

Women’s enterprises are less likely to be ‘favored firms’ Detrimental effects are larger on SMEs Undermines government’s credibility

Thwarts the public interest they were supposed to serve May undermine support for reforms by creating different

interests between favored and non-favored firms.

gap betweende facto and de jure

45 degree line

95thpctile

75thpctile

25thpctile5thpctile

The gap between de jure and de facto measures of regulation

Variations within a country are greater than the variation in averages across countries

Source: Hallward-Driemeierand Pritchett (2011)

Take away messages

Agenda -- supporting women to pursue higher value added activities, not raising entrepreneurship per se

Careful how you define ‘female enterprises’ Bring decision making authority into account where possible

Factors affecting entry and choice of enterprise are key Within sectors and size, gender is less important Gender can matter directly (restrictions in (family) law) and

indirectly(constraints that hit smaller firms harder)

Look at degree of variation in constraints across firms Associated with corruption and uncertainty Women less likely to be ‘favored firms’