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Gender Differences in Informal Labor-Market Resilience

Author

Listed:
  • Morgan Hardy
  • Erin Litzow
  • Jamie McCasland
  • Gisella Kagy
Abstract
This paper reports on the universe of garment-making-firm owners in a Ghanaian district capital during the COVID-19 crisis. By July 2020, 80 percent of both male- and female-owned firms were operational. However, pre-pandemic data show that selection into persistent closure differs by gender. Consistent with a “cleansing effect” of recessions and highlighting the presence of marginal female entrepreneurs, female-owned firms that remain closed past the spring lockdown are negatively selected on pre-pandemic sales. The pre-pandemic sales distributions of female survivors and non-survivors are significantly different from each other. Female owners of non-operational firms exit to non-employment and experience large decreases in overall earnings. In contrast, persistently closed male-owned firms are not selected on pre-pandemic firm characteristics. Instead, male non-survivors are 36 percentage points more likely than male survivors to have another income-generating activity prior to the crisis. Male owners of persistently closed firms fully compensate for revenue losses in their core businesses with earnings from these alternative income-generating activities. Taken together, the evidence is most consistent with differential underlying occupational choice fundamentals for self-employed men and women in this context.

Suggested Citation

  • Morgan Hardy & Erin Litzow & Jamie McCasland & Gisella Kagy, 2023. "Gender Differences in Informal Labor-Market Resilience," The World Bank Economic Review, World Bank, vol. 37(1), pages 112-126.
    • Handle: RePEc:oup:wbecrv:v:37:y:2023:i:1:p:112-126.
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    File URL: http://hdl.handle.net/10.1093/wber/lhac028
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    References listed on IDEAS

    as
    1. Mary Hallward-Driemeier, 2013. "Enterprising Women : Expanding Economic Opportunities in Africa," World Bank Publications - Books, The World Bank Group, number 13785, April.
    2. Morgan Hardy & Gisella Kagy, 2018. "Mind The (Profit) Gap: Why Are Female Enterprise Owners Earning Less Than Men?," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 252-255, May.
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    Cited by:

    1. Hardy, Morgan & Kim, Seongyoon & McCasland, Jamie & Menzel, Andreas & Witte, Marc, 2024. "Allocating labor across small firms: Experimental evidence on information constraints," Journal of Development Economics, Elsevier, vol. 171(C).

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    More about this item

    Keywords

    informality; firms; gender; COVID-19;
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