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Time to share the load: gender differences in household responsibilities and business profitability

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  • Irani Arráiz

    (Inter-American Development Bank)

Abstract

This paper uses data from 2408 micro and small businesses in Ecuador to study business profit differentials by gender. The results point to unpaid work—time devoted to household chores, child care, and care for the elderly—as the largest single factor explaining 33% of the difference in profits observed between male- and female-run businesses. When comparing male and female business owners with similar business and personal characteristics, the difference in business profits disappears. The results point to initial endowments, rather than returns on those endowments, as the reason why female-run businesses are less profitable. Also, they indicate that male and female entrepreneurs are equally effective as managers provided they have access to the same resources, including time.

Suggested Citation

  • Irani Arráiz, 2018. "Time to share the load: gender differences in household responsibilities and business profitability," Small Business Economics, Springer, vol. 51(1), pages 57-84, June.
    • Handle: RePEc:kap:sbusec:v:51:y:2018:i:1:d:10.1007_s11187-017-9925-z
    DOI: 10.1007/s11187-017-9925-z
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    More about this item

    Keywords

    Women; Entrepreneurs; Social norms; Use of time; Business profits; Ecuador;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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