Gender Differences in Informal Labour Market Resilience

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% of both male- and female-owned firms were operational. Using pre-pandemic data, we document 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. Persistently-closed male-owned firms are not selected on pre-pandemic firm characteristics. Instead, their owners are 36 percentage points more likely to have another income generating activity prior to the crisis and fully compensate for revenue losses in their core businesses with these alternative income generating activities.