The Effect of Female Leadership on Contracting from Capitol Hill to Main Street

Abstract

This paper provides novel evidence that female politicians affect the distribution of government spending to women-owned firms. Exploiting close elections to address endogeneity, we show that female House Representatives increase the allocation of U.S. government procurement contracts to women-owned firms in their respective districts. Consistent with inaccurate statistical discrimination, the effect persists after her departure, is strongest in districts with no prior female representation, and is not associated with declines in contract performance. Analysing congressional requests from legislators to federal agencies, we argue that female politicians use individual oversight to influence contract allocation.

Keywords: Female politicians, women-owned firms, female entrepreneurs, small businesses, government contracting, government procurement, gender bias, public expenditure allocation

JEL Classification: D72, G38, H57, J16, J71, L26, P16