Bolivia s informal economic sector is the largest in Latin America, and women-owned businesses tend to be overrepresented in the informal sector and to be less profitable than firms in the formal sector. This study seeks to better understand gender-based differences in firms tendencies toward formality, the impact of formality on profits, and the productivity of small informal firms. Using data from firm surveys, national household surveys, and qualitative data from focus groups, the study conducts a gender analysis of formality and productivity in six different sectors in Bolivia. The findings shed new light on how gender-based differences contribute to a firm s decision to become formal and the consequences of this decision for profitability. The outcomes of the study suggest that policies should focus on increasing the productivity and scale of women-owned businesses. Two general priorities emerge: promoting women s access to productive assets to facilitate growth and productivity and providing an enabling environment for women s entrepreneurship by expanding women s choices and capacity to respond to market opportunities.
Author(s): World Bank
Year: 2009
Language: English
Pages: 82
Contents......Page 5
Preface......Page 8
Acknowledgments......Page 9
Executive Summary......Page 10
Abbreviations and Acronyms......Page 16
Trends in Informality and Female Employment......Page 19
Figure 1.3. Female Labor Force Participation and Informality in LAC (2000?02, for Urban Areas)......Page 21
Box 1.1. Rigidities in the Labor Market......Page 26
Box 1.2. Benefits of Women Generating Income and Controlling Resources......Page 28
Gender-Based Differences in the Formality of Businesses......Page 30
Figure 2.2. Gender Gaps in Mean Monthly Profits, by Sector (Male Profits as a Share of Female Profits)......Page 33
Why Female-Owned Firms Are More Informal and Less Profitable......Page 36
Conclusions on Gender-Based Differences in Formality and Profitability......Page 41
Box 3.1. Focus-Group Methodology and Working with Data Based on Perceptions......Page 42
Male and Female Views on Productivity Constraints......Page 43
Figure 3.1 Productivity Constraints by Gender (% That Listed Issue as Very Important)......Page 44
Figure 3.4. Benefits of Associations, by Gender (% of Firms)......Page 51
Implications of Policies to Increase the Formalization and Productivity of Female Owners of Small and Micro Firms......Page 55
Promoting Women’s Access to Productive Assets......Page 57
Providing an Enabling Environment for Women’s Entrepreneurship......Page 62
References......Page 69
Appendix 1. Estimation Methods......Page 74
Appendix 2. Do the Factors That Affect Formality Vary by Gender?......Page 76
Appendix 3. Does the Impact of a NIT (and Other Factors) on Profits Vary by Gender?......Page 77
Appendix 4. Interest Rates for Microcredit Institutions in Latin America (June 2005)......Page 78
Appendix 5. Mutually Reinforcing Constraints on Female Micro Enterprises......Page 79
Table 1.1. Years of Schooling by Sector (Formal/Informal) and Gender......Page 25
Figure 1.7. Employment Outcomes by Gender and Ethnicity......Page 27
Table 2.2. Reasons to Formalize......Page 31
Table 2.3. Earnings (Hourly Profits) OLS Regressions for Small and Micro Businesses......Page 35
Figure 2.5. Gender Gaps in Years of Schooling, by Sector (Years of Schooling for Men Less Years of Schooling for Women)......Page 38
Table 3.1. Use of Financial Services, by Gender and Firm Size......Page 46
Table 3.2. Internal Rates of Return for a Doubling of Capital, by Sector and Gender......Page 48
Figure 1.2. Male and Female Urban Labor Forces, by Employment Category (%)......Page 20
Figure 1.4. Share of Informal Self-Employment in All Employment, by Gender and Marital Status, 2005......Page 22
Figure 1.5. Share of Informal Self-Employment in All Employment, by Age and Gender......Page 23
Figure 1.6. Share of Informal Employment in All Employment, by Economic Sector and Gender, 2005......Page 24
Figure 2.1 Average Impact of Having a Tax Number on Profitability, by Firm Size......Page 32
Figure 2.3. Gender Gaps in Hourly Wages, by Sector (Male Hourly Wage as a Share of Female Hourly Wage)......Page 34
Figure 2.4. Reasons for Preferring Self-Employment, Married Men and Women (% That Responded “Very Important?)......Page 37
Figure 2.6 Distribution of Male and Female Sample, by Sector......Page 39
Figure 2.7. Monthly Profits, by Sector and Gender......Page 40
Figure 3.2. Bank Loan and Micro Credit, by Gender......Page 45
Box 3.3. Female Firm Owners’ Perceptions of the Benefits of Organizing......Page 50
Figure 3.5. Female Employees as Share of Total, by Firm Size and Gender of Owner......Page 52
Box 3.4. Why Female Firm Owners Prefer Informality......Page 53
Box 3.2. Female Small and Micro-Firm Owners’ Perceptions of Constraints to Accessing Finance......Page 47
Box 4.1. Gender-Based Differences in the Returns to Capital......Page 58
Box 4.2. Property and Land Titles: Necessary but not Sufficient to Access Credit?......Page 59
Box 4.3. The Role of Training in Raising the Self-Efficacy of Self-Employed Women in Peru......Page 60
Box 4.4. The Role of Business Associations in Raising the Self-Efficacy of Self-Employed Women......Page 61
Box 4.6. Web-Based Handicrafts Exports From Bolivia......Page 63
Box 4.7. The Fashion District Initiative in Johannesburg......Page 64
Box 4.8 Childcare in Guatemala City......Page 65
Box 4.9. Red de Estancias Infantiles: A New Network of Day-Care Centers in Mexico......Page 66
