The inverted u-shaped relationship between female entrepreneurship and economic development

Ashraf, Nava ORCID: 0000-0003-3014-8439, Delfino, Alexia, Glaeser, Edward L. and Solmone, Irene (2025) The inverted u-shaped relationship between female entrepreneurship and economic development. AEA Papers and Proceedings, 115. 500 - 508. ISSN 2574-0768

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Abstract

In the World Bank Enterprise Survey, the share of entrepreneurs who are women first rises and then falls with national income, while female labor force participation has the opposite U-shaped pattern. We present a model in which gender-based disadvantages, such as discrimination and household obligations, deter firm formation in poor countries and complex firm formation in rich countries. In middle-income countries, high returns to entrepreneurship offset gender-based costs, and firms remain simple. We document that female-owned firms are smaller and simpler. Larger firms are more productive. The female entrepreneurship rate is associated with female education, weak kinship ties, and Buddhism.

Item Type:	Article
Additional Information:	© 2025 American Economic Association
Divisions:	Economics
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HQ The family. Marriage. Woman H Social Sciences > HC Economic History and Conditions
Date Deposited:	12 Jun 2025 10:24
Last Modified:	18 Jul 2025 15:09
URI:	http://eprints.lse.ac.uk/id/eprint/128372

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