Household Matters: Revisiting the Returns to Capital among Female Micro-entrepreneurs

Journal Article
Published on 1 September 2019

Abstract

Multiple field experiments report positive financial returns to capital shocks for male and not female microentrepreneurs. But these analyses overlook the fact that female entrepreneurs often reside with male entrepreneurs. Using data from experiments in India, Sri Lanka, and Ghana, Bernhardt et al. (2019) show that the observed gender gap in microenterprise responses does not reflect lower returns on investment, when measured at the household level. Instead, the absence of a profit response among female-run enterprises reflects the fact that women's capital is typically invested into their husband's enterprise. They cannot reject equivalence of household-level income gains for male and female capital shock recipients.

Authors

Arielle Bernhardt

Harvard University

Rohini Pande

Yale University

Natalia Rigol

Harvard University