Eassays on the Constraints on Micro Enterprises Run by Women

Abstract

Female labor force participation in Pakistan is among the lowest in the world. While female participation in enterprise is particularly low in Pakistan, it is nearly always less than that of men around the world, implying additional constraints on enterprise faced by women. Though a significant number of studies have looked at the impact of finance, a holistic measurement of the constraints faced by female entrepreneurs is rare. This dissertation investigates challenges faced by women from low income households in setting up their own enterprise. Chapter 1 uses data from a randomized control trial with 630 women in Punjab, Pakistan where randomly selected microfinance applicants were provided with a small loan and training to set up their own business. The study finds that access to finance does lead to more businesses being set by women, but treated businesses are also more likely to shut down during the year and that the loan fails to improve individual or household outcomes significantly. Chapters 2 uses data from artefactual experiments to investigate norms surrounding resource sharing in the household. Results indicate that resource sharing in the household is related to expectations of appropriation by other household members and a sense of entitlement over own earnings. Chapter 3 uses data from innovative lab-in-field experiments to investigate male and female preferences for businesses set up by women and for their interactions outside the home. Women prefer businesses closer to the home, even if it means constraining the size of the business, and that this ‘home bias’ extends to other spheres that can influence business growth, such as who to approach for advice. This dissertation provides insight into why many impact evaluations have found limited effects of finance and training on female-owned businesses and suggests taking a holistic approach for encouraging enterprise as an income generating activity for women.