Are Women more Credit Constrained? Experimental Evidence on Gender and Microenterprise Returns

We report on a field experiment providing random grants to microenterprise owners. The grants generated large profit increases for male owners, but not for female owners. We show that the gender gap does not simply mask differences in ability, risk aversion, entrepreneurial attitudes, or differences in reporting behavior, but there is some evidence that the gender gap is larger in female-dominated industries. The data are not consistent with a unitary household model, and indeed, imply an inefficiency of resource allocation within households. We show evidence that this inefficiency is reduced in more cooperative households.

de Mel et al (2009)

Region:

Peri-urban.RCT.Grants of $100 and $200 in cash or in-kind.Positive returns to capital for men's businesses; mixed impact on women's businesses. Women invest very little of smaller grants in business, but as much, if not more than men of the larger grant. Women do not experience permanent increases in business income from grants, while men do.http://siteresources.worldbank.org/DEC/Resources/Are_Women_More_Credit_Constrain...405 low-capital microentrepreneurs (50% women).