Home-based Informal Businesses and the Gender Dimension

Mohammad Amin, Enterprise Analysis Unit, FPDEA, World Bank

Abstract

Anecdotal evidence suggests that working from home makes it easier to balance work and family life. This is particularly attractive to women, who are viewed as primary caregivers in the family in most developing countries. However, there is some concern in the literature that family responsibility may detract from doing business, leading to fewer hours of operation and lower efficiency for home-based businesses run by women. The present paper tests these hypotheses using data on informal or unregistered firms in five African countries. We find strong evidence that female entrepreneurs have a greater proclivity compared with male entrepreneurs to work from home than outside. However, differences between firms located inside vs. outside household premises in the number of hours a business normally operates and firm efficiency are neither economically large nor statistically significant. Further, these differences are roughly same for male and female managed businesses. In short, working from home does not appear to be disadvantageous to businesses, and it does not discriminate against women entrepreneurs.

[Data and Stata do files included]