The gender gap in firm productivity in Rwanda
Evidence from establishment and household enterprise data
Rwanda is one of the countries with the best strategies for women empowerment and gender equality in Africa and globally. Nonetheless, some inequalities exist especially in education attainment.
This study investigates the gender gaps in business performance using nationally representative household survey and establishment census data.
Ordinary Least Squares results indicate that female-owned business enterprises employ fewer workers and are less productive than male-owned counterparts. Specifically, turnover and net revenue per worker are 20-22 per cent and 22-25 per cent lower among female-owned enterprises.
The results are corroborated by propensity score matching estimates, implying that the estimated gender productivity gap is robust to observed heterogeneity between male- and female-owned enterprises.
We investigate the potential mechanisms and find that female owners invest less capital, are less likely to seek and/or obtain credit and devote fewer hours per week to their businesses. Credit products targeting collateral-constrained and female-owned household enterprises could partially close the gender productivity gap.