Mind The (Profit) Gap: Why Are Female Enterprise Owners Earning Less Than Men?

This paper explores potential causes for the well-documented profit gap between male- and female-owned microenterprises in low-income countries

From:: Foreign, Commonwealth & Development Office
Published: 1 May 2018

Country:: Ghana
Document Type:: Journal Article
Theme:: Economic Growth
Authors:: Hardy, M, Kagy, G

Abstract

We explore potential causes for the well-documented profit gap between male- and female-owned microenterprises in low-income countries. We use rich data from an ongoing field project in Ghana’s garment making sector, and our study sample consists of all garment making firms in a midsize district capital. Even within the same industry, male-owned firms earn nearly twice as much profit as female-owned firms. Furthermore, we find the large and persistent gender difference in profits cannot be explained by our extensive firm- and owner-level characteristics. We conclude that factors outside of individual firm or firm-owner characteristics are likely to be at play.

This work is part of the Private Enterprise Development in Low Income Countries (PEDL) programme

Citation

“Hardy, M. and Kagy, G. (2018) ““Mind The (Profit) Gap: Why Are Female Enterprise Owners Earning Less Than Men?” AEA Papers and Proceedings VOL. 108, MAY 2018