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Can gender blinding policies promote female entrepreneurship? The role of discrimination and access to capital

Work & Education Ethiopia

Picture Credit: Elisa Cascardi

There is a well-documented “gender profit gap” for small and medium enterprises in developing countries. Yet, observable differences between men and women entrepreneurs explain only a small portion of this earnings differential. This suggests that gender discrimination may be an important, yet understudied, factor inhibiting the success of female entrepreneurship. If women face discrimination in the evaluation of their businesses, this may reduce female entrepreneurs’ ability to obtain capital, which in turn reduces the performance of their business. Policy solutions that reduce such discrimination, such as gender blinding, could both increase gender equity and potentially improve efficiency in the allocation of capital, unleashing the high-growth potential of many businesses in Sub-Saharan Africa with downstream effects on job creation, economic growth, and innovation. Using a randomized controlled trial, this study will identify whether gender discrimination affects the evaluation of businesses by financial service providers, and whether gender blinding can reduce such discrimination. Results forthcoming.

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