It's getting crowded in here: Experimental evidence of demand constraints in the gender profit gap

Morgan Hardy, Gisella Kagy

Research output: Contribution to journalArticlepeer-review

Abstract

This article considers market-level contributors to the well-documented gender profit gap among microentrepreneurs. We combine data from a garment-making firm census and market research survey in Ghana, uncovering a gender gap in the market-size-to-firm ratio and observing disproportionate self-reports of 'not enough customers' from female owners. We develop a simple model and discuss implications of potential gender differences in demand constraints. As experimental corroboration, we show that female-owned firms expand production and experience profit increases in response to random demand shocks, while male-owned firms do not. Nationally representative data echoes our experimental findings, showing more crowding in female-dominated industries.

Original languageEnglish (US)
Pages (from-to)2272-2290
Number of pages19
JournalEconomic Journal
Volume130
Issue number631
DOIs
StatePublished - 2021

ASJC Scopus subject areas

  • Economics and Econometrics

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