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Covid-19 affected women-headed firms disproportionally mainly because stay-at-home orders and school and day care closures resulted in “unpaid” jobs at home, a new paper shows.
Women-owned businesses were more adversely affected by the pandemic than other businesses, but the strong public health policy response to Covid-19 reduced the observed gap in performance, according to a working paper by a group of academic researchers.
Since the beginning of the pandemic, evidence has shown that women workers and entrepreneurs have been disproportionately impacted by Covid-19. The results of the academics' research showed that monthly sales growth during the pandemic was lower by 3 percentage points among women-owned companies and they were closed 17% longer than other businesses, the working paper says.
However, considering the differences between men and women entrepreneurs in their risk perception and work-life trade-offs, the researchers say it was inevitable that the pandemic affected women-owned businesses more. This is mostly because stay-at-home orders and school/day care closures resulted in “unpaid” jobs at home, including child education and care activities.
Public Policy Matters for Women-owned Firms
Public health policies—such as information campaigns, contact tracing and testing policies—significantly reduced the observed gender gap in performance, according to the paper. These policies could help reduce the gender gap by providing reliable and timely public health information and extending access to essential health services, the paper shows.
For example, containment policies that allowed the reopening of schools and day cares helped fix work-life balance issues for women entrepreneurs that had become skewed and increased their family responsibilities more than they did for men, according to the researchers.
These results provide meaningful input for the preparation of sound interventions that avert or mitigate adverse effects on disadvantaged groups. For example, policy interventions that aim to improve economic recovery could pay special attention to the needs of women enterprises, just as other economic policies emphasize the needs of small and medium enterprises, the researchers contend.
In the study, the academics used the World Bank’s Covid-19 Tracking Database, which provides monthly business performance data, and other surveys to gauge prepandemic business performance. The combined datasets covered more than 20,000 mainly small and medium businesses across 38 countries.
For more information from the working paper click here.
Andre Claudio is an assistant editor at Route Fifty.