Gender and Informality (A short note)

Mohammad Amin, Enterprise Analysis Unit, FPDEA, World Bank

Abstract

For a sample of informal firms in Burkina Faso, Cameroons, Cape Verde, Cote d’Ivoire, Madagascar and Mauritius, this note compares male and female owned businesses. The results provide mixed evidence on a number of hypotheses discussed in the literature for firms in the formal sector. First, the female under-performance hypothesis is confirmed, but only for firm-size. For firm-efficiency measured by the average productivity of labor, we find little difference across male and female owned businesses. Second, consistent with the view that women may face glass-ceiling in getting managerial positions, we find that women managers in our sample have less experience than male managers. However, this difference holds only within the sample of the relatively young firms. We provide some explanation for this heterogeneity across young and old firms. Third, as documented in the literature, there is greater proclivity among women relative to male entrepreneurs to work from home than outside. However, working from home does not appear to be disadvantageous to women entrepreneurs; at least, no more than for male entrepreneurs. In fact, working from home protects women owned businesses from crime and more so than male owned businesses. Last, women entrepreneurs are found less likely to have a bank account and use external sources of finance than male owned businesses. Reasons for not seeking a loan also appear to vary by the gender of the owner and are discussed.