Bengaluru: Female entrepreneurship in poor countries can be a critical pathway to development. However, across the world, women are less likely than men to succeed as micro-entrepreneurs: They invest less in their businesses and earn less profit. While research has revealed that this is because of intra-household dynamics, especially relationships with spouses, less is known on how exactly this happens.
A new paper by Sophia Friedson-Ridenour of the University of Wisconsin-Madison and Rachael S. Pierotti of the World Bank uses data from a qualitative study in Accra, Ghana, between January 2016 and June 2017 to show how women’s business decisions were influenced by several household-related factors.
One important factor is the desire for their partner to bear responsibility for certain expenses.
Since men are expected to meet large and essential needs of the household, women entrepreneurs hide income and savings, and sometimes explicitly limit business growth, as a mark of respect for their husbands who would continue to pay for items like housing, school fees and food.
Another factor is the need to provide for the family’s daily provisions and long-term security.
To do this, women prioritized savings over investment. In addition, insecurities about their marriage also made them prioritize savings.
These findings suggest that it is a mistake to assume that economic decision-making for women is an individual process. Efforts to support women micro-entrepreneurs need to keep in consideration women’s responsibilities within their households. For instance, capital subsidy programmes, a common policy to support female entrepreneurship, will have different effects on women and will depend on how her business defines her intra-household relationships.
Also read: Competing Priorities: Women’s Microenterprises and Household Relationships.