Women-Led Small- and Medium-Sized Enterprises During COVID-19: Examining Barriers and Opportunities

Abstract

This study synthesizes evidence on gender dimensions of small- and medium-sized enterprises (SMEs) in low- and middle-income countries (LMICs) following the COVID-19 pandemic. Women-led SMEs are associated with lower average profits, lower revenues, fewer employees, smaller networks, and higher costs of capital. The COVID-19 pandemic exacerbated gender gaps among SMEs and undermined progress toward gender equality. To inform interventions that can support gender-intentional policy and market responses, the study builds on the conceptual model proposed by Andrea Cornwall (2016) to advance the construct of “path-dependent market dynamics,” which captures how gendered social structures of market organization and behavior influence actions. Together with gendered legal discrimination, social norms, internalized behaviors, allocation of care work, mobility, and unequal access to financing, these sticky market features and dynamics can limit the effectiveness of economic recovery programs. The study suggests areas for evidence-based experimentation that can guide gender-intentional interventions for SMEs going forward.

HIGHLIGHTS

• During the pandemic, women-led businesses experienced larger earnings losses and higher closure rates than men-led ones.

• Among barriers for women-led businesses, gendered structures of market organization and behavior are under-studied.

• Enduring gender norms can limit effectiveness of economic recovery programs.

• Gender-intentional enterprise programs should include evaluation components.

KEYWORDS:

• Bargaining power
• childrearing
• gender economics
• gender mainstreaming
• occupational segregation
• women and economy

JEL Codes:

• L16
• L26
• L25

ACKNOWLEDGMENTS

We thank three referees and the Editor at Feminist Economics for their insightful reviews that helped improve the paper. We thank Miki Khahn Doan (World Bank) for her research assistance in the preparation of this article, and Kathleen Beegle (World Bank), Markus Goldstein (World Bank), Morgan Hardy (NYU-Abu Dhabi), Krishna Jafa (Stanford Global Center for Gender Equality), Gisella Kagy (University of Wisconsin - Madison), and Lucia Sanchez (Innovations for Poverty Action) for all their helpful inputs from ongoing and prior research. Morgan Hardy (NYU-Abu Dhabi), Gisella Kagy (University of Wisconsin - Madison), Elizabeth Katz (Global Center for Gender Equality at Stanford University), Mayra Buvinic (Center for Global Development), Megan O’Donnell (Center for Global Development), Michael Walton (Harvard Kennedy School and IMAGO), and two colleagues from the Africa Gender Innovation Lab at the World Bank provided valuable critical feedback on an earlier draft, and we are grateful for their suggested improvements. This article is a revised version of a prior working paper that is part of the Bill and Melinda Gates Foundation’s “COVID-19 and Women’s Economic Empowerment” evidence review series. All errors and omissions are our own.

Additional information

Notes on contributors

Michael Kevane

Michael Kevane is Professor in the Department of Economics at Santa Clara University where he teaches courses on African economic development, gender and development, and econometrics using R. He has published articles in Proceedings of the National Academy of Science, World Development, Economic Development and Cultural Change, Review of Development Economics, and American Journal of Agricultural Economics. Other research focuses on how libraries promote reading, with articles published in Libri, World Libraries, and Bulletin des Bibliothèques de France. He is a co-editor of Kordofan Invaded: Peripheral Incorporation and Social Transformation in Islamic Africa (1998), author of Women and Development in Africa: How Gender Works (2014, 2nd edition), and co-author of Rural Community Libraries in Africa: Challenges and Impacts (2014). He is past President of the Sudan Studies Association and co-director of Friends of African Village Libraries.

Aishwarya Lakshmi Ratan

Aishwarya Lakshmi Ratan works as Deputy Director of the Economic Growth Center at Yale University. She previously worked as Senior Program Officer in the Gender Equality team at the Bill and Melinda Gates Foundation, focused on building the evidence-base around women’s economic empowerment and women's collectives. Other previous roles include Research Program Officer for the Financial Services for the Poor team at the Gates Foundation; Director of Monitoring, Research and Evaluation at the non-profit Women for Women International; Director of the Global Financial Inclusion Initiative at Yale University and Innovations for Poverty Action; and Associate Researcher in the Technology for Emerging Markets group at Microsoft Research in India. Aishwarya earned a Bachelor’s degree in Economics and Women’s Studies from Wellesley College and a Master’s degree in Public Administration and International Development from the Kennedy School of Government at Harvard University.

Diva Dhar

Diva Dhar is currently Program Officer with the Measurement, Learning, and Evaluation team at the Bill and Melinda Gates Foundation in India. She works on research and evaluations on gender, child health and nutrition, ICT, as well as health systems design. She was formerly the Associate Director at J-PAL South Asia for Evaluation Capacity Building and the Program Director of the Centre of Learning on Evaluation and Results (CLEAR) in South Asia, where she worked on strengthening M and E capacity in the region and promoting evidence informed decision-making. Previously, she worked for J-PAL and Innovations for Poverty Action (IPA) on several impact evaluations in India, Morocco, and Bangladesh. She has also worked as a consultant for the World Bank, Planning Commission, and other non-profit organizations in India.