Aggregate Implications of Barriers to Female Entrepreneurship

54 Pages Posted: 22 Feb 2021 Last revised: 18 Nov 2021

See all articles by Gaurav Chiplunkar

Gaurav Chiplunkar

University of Virginia - Darden School of Business

Pinelopi Goldberg

Yale University - Department of Economics; National Bureau of Economic Research (NBER); Yale University - Cowles Foundation

Date Written: February 2021

Abstract

We develop a framework for identifying and quantifying barriers to entry and operation faced by female entrepreneurs in developing countries, and apply it to the Indian economy. We find that despite considerable progress over time, female entrepreneurs still face substantial entry and business registration costs (almost twice their male counterparts’). The costs of expanding a business, conditional on entry, are also substantially higher for women. However, there is one area in which female entrepreneurs have an advantage: hiring female workers is easier for them. We show that this pattern is not driven by the sectoral composition of female employment. Counterfactual simulations indicate that removing all excess barriers faced by women entrepreneurs would: (a) increase the fraction of female-owned firms significantly (nine times); (b) increase the real wages of female relative to male workers; and (c) generate substantial aggregate productivity and welfare gains (ca. 7% and 18% respectively). These large gains are due to reallocation: low productivity male-owned firms previously sheltered from female competition are replaced by higher productivity female-owned firms previously excluded from the economy.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Chiplunkar, Gaurav and Goldberg, Pinelopi (Penny), Aggregate Implications of Barriers to Female Entrepreneurship (February 2021). Available at SSRN: https://ssrn.com/abstract=3790224 or http://dx.doi.org/10.2139/ssrn.3790224

Gaurav Chiplunkar (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Pinelopi (Penny) Goldberg

Yale University - Department of Economics ( email )

P.O. Box 208268
37 Hillhouse Avenue
New Haven, CT 06520-8268
United States
203-432-3569 (Phone)
203-432-6323 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
3
Abstract Views
140
PlumX Metrics