Gender Differences in Informal Labour Market Resilience

Working Paper
Published on 22 September 2022

A first version of this paper was published on 31 December 2021. A second version on 18 June 2022. 

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% 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.

Authors

Morgan Hardy

New York University, Abu Dhabi

Erin Litzow

University of British Columbia

Jamie McCasland

University of British Columbia

Gisella Kagy

Vassar College