The well-being of women entrepreneurs: the role of gender inequality and gender roles

Plain English SummaryWomen entrepreneurs are less happy than men in low-income countries, while the opposite holds in high-income countries. This negative effect is stronger for less educated women, for women with children, and in countries with greater gender discrimination, low access to financial resources, and more traditional gender roles. This study documents a wellbeing gap between female and male entrepreneurs in countries with different levels of economic development. In low income countries, women entrepreneurs report lower subjective well-being relative to men, while in high-income countries, women entrepreneurs are happier than men. In low-income countries, women face more obstacles and constraints to being an entrepreneur, such as lower education, lack of childcare options, lack of access to finance, unfair legal treatment, and more sexist gender roles and traditions. The results are consistent with the proposition that in low-income countries women prefer wage employment. When their labor market outcomes are limited, they are more likely to be "pushed" into entrepreneurship and derive lower satisfaction from their entrepreneurial activities. The primary policy implications should aim at equalizing the playing field for men and women entrepreneurs, improving labor market conditions, and increasingwage-earning opportunities for women. The current study presents new evidence on the well-being of women entrepreneurs using data from the World Values Survey for 80 countries. Results indicate that in low- and middle-income countries, female entrepreneurs have lower well-being than male entrepreneurs, while in high-income countries, they have higher well-being. Several macro and micro-level mechanisms- institutional context, gender roles, and individual characteristics-that potentially moderate this relationship are explored. The gender gap in well-being is larger in countries with higher gender inequality, lower level of financial development, and stricter adherence to sexist gender roles. Additionally, women entrepreneurs with lower education, more children, and risk-averse preferences are more likely to report lower well-being. The results suggest several policy mechanisms that can be used to enhance the well-being of women entrepreneurs.