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The inverted u-shaped relationship between female entrepreneurship and economic development

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  • Ashraf, Nava
  • Delfino, Alexia
  • Glaeser, Edward L.
  • Solmone, Irene

Abstract

In the World Bank Enterprise Survey, the share of entrepreneurs who are women first rises and then falls with national income, while female labor force participation has the opposite U-shaped pattern. We present a model in which gender-based disadvantages, such as discrimination and household obligations, deter firm formation in poor countries and complex firm formation in rich countries. In middle-income countries, high returns to entrepreneurship offset gender-based costs, and firms remain simple. We document that female-owned firms are smaller and simpler. Larger firms are more productive. The female entrepreneurship rate is associated with female education, weak kinship ties, and Buddhism.

Suggested Citation

  • Ashraf, Nava & Delfino, Alexia & Glaeser, Edward L. & Solmone, Irene, 2025. "The inverted u-shaped relationship between female entrepreneurship and economic development," LSE Research Online Documents on Economics 128372, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:128372
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    References listed on IDEAS

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    1. Benjamin Enke, 2019. "Kinship, Cooperation, and the Evolution of Moral Systems," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 953-1019.
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    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • N0 - Economic History - - General

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