GENDER LAB Brie - 2 Ocoe 21 FEMALE ENTREPRENEURS WHO SUCCEED IN MALE-DOMINATED SECTORS IN ETHIOPIA Authors: Salman Alibhai, Niklas Buehren and Sreelakshmi Papineni KEY MESSAGES * In developing countries, female entrepreneurs have low returns. Yet, the few women who cross over into traditionally male-dominated sectors double their profits. So why don't more women cross over? * When parents and husbands support them, women are more likely to cross over. When they lack information on the earnings potential in male-dominated sectors, they are less likely to. This suggests a path to promote women entrepreneurs crossing over. * Women who cross over face particular operational challenges, and may need additional support, both in overcoming discrimination and in building networks. The challenges Ethiopian women face in getting jobs and earning income come from a range of sources. Women start from a more difficult situation than men --without easy access to finance, land, training, education and effective business networks'. The share of women in Ethiopia without education is almost twice that of men, which in turn limits women entrepreneurs' ability to grow their businesses2. Reducing gender inequalities in education and the labor market could increase annual GDP growth in Ethiopia by around 1.9 percentage points3. Occupational sector selection has been identified as an important determinant of returns for female entrepreneurs. If sectors that are traditionally male-owned provide an opportunity to earn higher returns then why do women continue to work in lower return sectors? Here we examine this question in a bid towards encouraging the productivity of female businesses and closing the gender gap. I Triodos Facet 2011 2 The Ethiopia Demographic and Health Survey 2011 3 Unleashing the Potential of Ethiopian Women, World Bank 2008 For more information visit us at: http://www.world bank.org/en/programs/af rica-gender- in novation- lab SO WHAT TO DO ABOUT IT? In 2011, the Gender Innovation Lab conducted a We decided to revisit these findings in Ethiopia to study in Uganda to examine the possible explanations see if the results hold in a different context. IAs it for why women do not cross over to more profitable, turns out, in Ethiopia the findings are similar - women male dominated sectors. Two significant findings who work in more male-dominated sectors earn were revealed from this study: 1. Firms owned significantly more than those who do not - reinforcing by women who cross over are about three times the importance of sector selection on profitability. more profitable, on average, than firms owned by The new study in Ethiopia also illuminates some of women who remain in traditionally female sectors; the unique challenges that women entrepreneurs 2. Businesses owned by women who cross over are face working in male-dominated sectors. just as profitable as businesses owned by men. WHAT ARE THE MALE DOMINATED SECTORS? PERCENTAGE OF RESPONSES WHO REPORTED MOST BUSINESSES IN THIS SECTOR ARE OWNED BY MEN/WOMEN Wood Works Maintenance (non-auto) Engineering Services Construction Works Metal Works and Engineering Tourism Services Building Materials Manufacturing Leather Manufacturing Poultry Small Transport Services Storage and Warehousing Wholesale Modern Livestock Rearing Equipment Leasing Services Business Services Animal Feed Production Communications Services Textile Manufacturing Retail Software Development Decorating Services Food/Beverage Production Caf6 and Restaurants Beauty Salon 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Male dominated sectors are those where >75% responses from the sample of 2,369 reported "owned by men" WEDP clients said most businesses within their sector are owned by men. reported "owned by women" Figure 1: The graph shows the sectors that were classified as male-dominated that include 164 crossovers and female-dominated that include 626 non-crossovers. HERE'S WHAT WE DID sectors. Crossover firms have statistically higher profits To study the question of why more women don't and are significantly larger as measured by the number crossover to more profitable, male dominated of employees. This data shows that supporting female sectors, we used quantitative data collected in 2014 entrepreneurs to enter sectors that are male-dominated on asamle f 79 woen ntrprenursas artis associated with significant business growth. on a sample of 790 women entrepreneurs as part of the Women's Entrepreneurship Development Project (WEDP) supported by the World Bank. PROFITS OF FEMALE FIRMS The sample of 790 women entrepreneurs were PROFITS PAST MONTH (ETHIOPIAN BIRR) randomly selected from a larger sample of 2,369 registered WEDP clients across six different Ethiopian cities: Addis Ababa, Adama, Bahir Dar, Dire Dawa, 6172 Hawassa and Mekelle. WEDP programming targets growth-oriented female entrepreneurs and therefore our sample should not be deemed Crossovers Non-Crossovers representative of all female Ethiopian entrepreneurs. FIRM SIZE OF FEMALE FIRMS We investigated the differences in size and firm- NUMBER OF EMPLOYEES level performance between enterprises owned 1.95 by crossover and non-crossover women. We also looked for potential differences in household demographics, wealth status, financial access, entrepreneurial characteristics, influences and Crossovers Non-Crossovers business challenges to understand the factors associated with women crossing over to male dominated sectors. We interpret these differences THEM, WOMEN ARE MORE LIKELY TO CROSS simply as correlations between the outcome of OVER. WHEN THEY LACK INFORMATION ON THE interest and a woman's likelihood of crossing over EARNINGS POTENTIAL IN MALE-DOMINATED but cannot always be sure on the direction of SECTORS, THEY ARE LESS LIKELY TO. causality. By investigating the characteristics of SPOUSAL SUPPORT / Crossover women are more crossover women we try to uncover what encourages likely to be married, live in bigger households, have or prevents certain women from crossing over. more children and live in households with a higher asset wealth status. The husband of a crossover HERE'S WHAT WE FOUND woman is also 25 percentage points more likely to work in a business himself than the non-crossover CROSSOVER FIRMS OUTPERFORM husbands. Crossover firms are more likely to report NON-CROSSOVER FIRMS having started their business due to an opportunity We find that female enterprises in male-dominated provided to them by their husband. Therefore, involving sectors perform better than those in traditional female men could open up new opportunities for women. PARENTAL INFLUENCES / We analyzed the for ability, Digitspan Test and Raven's Test, plus occupational choices of the father and mother of measures of impatience, self-efficacy, strive for women entrepreneurs and found that if the father had achievement, impulsiveness, passion for work, a wage job then this is positively correlated with being tenacity, locus of control, work centrality and being a crossover. On the other hand, if either the mother an organized person were all balanced across or father had worked on a farm this is negatively crossover and non-crossover entrepreneurs. correlated with being a crossover. Qualitative work suggests that a father's occupation could influence a women's likelihood of crossing over through choice, reveal that start-up capital considerations providing start-up funds for a business or initiating are not an important predictor of the type of introductions to appropriate contacts in male- business that women end up in. However, both dominated industries. This result reinforces findings crossovers and non-crossovers commonly cite from the Uganda study that concluded early exposure by a male role model is important in encouraging wome toente a ale-omiatedsecor.as the top challenge faced in the business. women to enter a male-dominated sector. INFORMATION BARRIERS ABOUT SECTOR HARASSMENT AND DISCRIMINATION / For PROFITABILITY / We find that female entrepreneurs are unaware of the potential profitability of male- dominated sectors. 64% of the non-crossover firms have lower profits than the average level of y profits for crossover firms but incorrectly believe subject to some form of abuse. Crossover women they make the same or more than crossovers when face more difficulty in terms of discrimination they actually do not. Informing women, particularly in their youth, about the potential profitability of crossovers. In particular, crossovers are more varius usiess ectrs oul be mpotan tolikely to report that clients prefer to deal with various business sectors could be important to forality businespawnest and thyaren'so oespu encourage entry into the higher return sectors. i ne eeas or likely to face problems with male employees. WOMEN WHO CROSS OVER FACE PARTICULAR BUILDING NETWORKS / In terms of networks, CHALLENGES, AND MAY NEED ADDITIONAL crossover women are significantly more likely SUPPORT, BOTH IN OVERCOMING OPERATIONAL t aedfiut nbidn ewrsi hi CHALLENGES AND IN CREATING NETWORKS. t aedfiut nbidn ewrsi hi sector of operation and do not seem to benefit ENTREPRENEURIAL ABILITY / Interestingly, from networks of females in the same industry. women who cross over do not seem to differ from Crossover entrepreneurs are more likely to feel non-crossovers in various measures of cognitive despised by other women business owners. and non-cognitive skills. Specifically, proxies POLICY PRIORITIES Providing support to women entrepreneurs to transition into more profitable sectors that are often male-dominated is a step in the right direction to close the gender gap. Further experimentation is needed to determine the most effective approaches. EDUCATE ON SECTOR PROFITABILITY / Providing information to youth about the profitability of certain business sectors through career guidance in schools, work experience or apprentice schemes could correct beliefs about profitability and encourage more women to enter higher-return male-dominated sectors. Similarly, raising awareness of current women business owners on sector profitability may allow for diversification into more profitable ventures. ENGAGE MEN / Women with supportive husbands and fathers are more likely to cross over into a male-dominated sector. Men should be encouraged to introduce their wives or daughters to their own business networks, pass on key technical skills and/or help them access start-up capital. ESTABLISH BUSINESS NETWORKS / Facilitating access to networks and providing training on how to overcome discrimination and improve negotiation skills could give women a collective voice and ameliorate some of the challenges women face when operating within a male-dominated sector. CREDIT PROVISION / Dedicated lending initiatives such as WEDP which are supporting female entrepreneurs in maintaining business operations are critical to easing financial constraints and helping their businesses grow.