The determinants of entrepreneurship gender gaps: A cross‐country analysis

• Published date: 01 February 2019
• Author: Marc Teignier,Sadia Priyanka,David Cuberes
• DOI: http://doi.org/10.1111/rode.12537
• Date: 01 February 2019

REGULAR ARTICLE

The determinants of entrepreneurship gender gaps:

A cross‐country analysis

David Cuberes

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Sadia Priyanka

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Marc Teignier

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Clark University, MA, USA

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Universitat de Barcelona and BEAT,

Barcelona, Spain

Correspondence

David Cuberes, Economics Department

Clark University, Jonas Clark Hall rm

124 950 Main St. Worcester, MA 01610.

Email: DCuberes@clarku.edu

Abstract

This paper uses aggregate data from the International

Labor Organization and microeconomic data from the

European Values Study to quantify gender gaps in

entrepreneurship, distinguishing between gender gaps in

employership and in self‐employment, and study their

main empirical determinants. Our sample consists of 40

European countries and varies broadly in terms of institu-

tional background since it includes several ex‐Communist

countries. In the aggregate data we observe a gender

gap in employers of 59% and a gender gap in self‐

employment of 36%. These gaps have remained roughly

constant in the 2000–2017 period, although there are

wide differences in both their levels and evolution over

time and across countries. Using microeconomic data, we

find that the incidence of entrepreneurship, employership,

and self‐employment among men is much larger than

among women, consistent with the gaps estimated using

aggregate data. Our regressions show that these gaps are

still sizable even after controlling for a large set of con-

trol variables that include marital status, age, education,

number of children, wealth, the participation of parents

and spouse in entrepreneurship, values toward women,

social capital, and prior unemployment. We identify

important differences between the determinants of these

gaps in ex‐Communist countries and in high‐income

ones.

DOI: 10.1111/rode.12537

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© 2018 John Wiley & Sons Ltd wileyonlinelibrary.com/journal/rode Rev Dev Econ. 2019;23:72–101.

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INTRODUCTION

Most of the existing empirical work on the determinants of gender gaps in the labor market has

focused on gaps in labor force participation. However, as pointed out in Cuberes and Teignier

(2016), gender gaps in entrepreneurship are quite large, vary significantly across countries, and are

associated with large output losses at the macroeconomic level. Identifying some of the relevant

factors that can explain these gaps is therefore a crucial step toward formulating policies to narrow

them.

In this paper we examine the main correlates of gender gaps in entrepreneurship, distinguishing

between gaps in employers and in self‐employed, for a large set of countries. We do so using

aggregate data from the International Labor Organization (ILO) and microeconomic data from the

European Values Study Survey (EVS), a microeconomic survey that contains relevant information

on different aspects of entrepreneurship and their potential determinants. Throughout the paper we

present results for our sample of 19 high‐income and 21 ex‐Communist countries.

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As we explain

below, these two groups of countries are markedly different than the rest of the sample in terms of

income per capita, their type of institutions, and their view on women's rights.

We use the macro evidence to present differences in these gaps across countries and their evo-

lution over time. However, since it is hard to use macrodata to explain these patterns, in all the

analysis that follows we focus on the microeconomic data. Our empirical model using microdata

accounts for several factors that affect female entrepreneurship, including individual characteristics

(family background, education, income, among others) and individuals’views on different socioe-

conomic variables (trust in their society, values toward women, among others). We choose these

variables to explain gender gaps following the predictions of economic theory and of related

empirical studies. We acknowledge that many of these variables are endogenous and that it is a

daunting task to find appropriate instrumental variables for them. Therefore, it is important to

emphasize that, throughout the paper, our results should be interpreted as correlation but not causa-

tion. While this is an obvious drawback of the study, we believe that using microeconomic data to

explain cross‐country differences in entrepreneurship and some of their main correlates is an

important step toward shedding light on understanding why entrepreneurship is a much less com-

mon occupation among women than men.

The rest of the paper is organized as follows. In Section 2 we take a first look at the aggregate

data on gender gaps in entrepreneurship in our sample of countries and the sample of ex‐Commu-

nist countries. Section 3 reviews the literature on the determinants of entrepreneurship, with special

emphasis on papers that analyze differences between men and women. The empirical strategy of

the paper is outlined in Section 4, while the microdata we use is described in Section 5. The

empirical results of the study are discussed in Section 6. Section 7 concludes.

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A FIRST LOOK AT THE AGGREGATE DATA

As in Cuberes and Teignier (2016), in this section we use labor market data from the ILO (KILM,

2015) to show some stylized facts about gender gaps in entrepreneurship in our sample of coun-

tries. We proxy the number of employers with the variable employers, and the number of self‐

employed with the variable own account workers. We then collect data on these two variables by

gender and calculate the following gender gaps:

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