Gender Gaps in Entrepreneurship and their Macroeconomic Effects in Latin America

Marc Teignier Baqué; David Cuberes

doi:10.29105/ensayos45.2-1

Authors

Marc Teignier Baqué Universitat de Barcelona https://orcid.org/0000-0003-0760-5662
David Cuberes Maynooth University https://orcid.org/0000-0002-4933-9369

DOI:

https://doi.org/10.29105/ensayos45.2-1

Keywords:

firm-size distribution, entrepreneurship talent, gender inequality, talent misallocation, aggregate productivity, span of control

Abstract

Objective: To analyze gender gaps in entrepreneurship in Latin America and the Caribbean and quantify their aggregate effects on productivity and income per capita. Methodology: Gender differences in entrepreneurship were documented using evidence on the participation and size of female-run firms, and the theoretical framework developed by Cuberes and Teignier (2022) was employed to quantify their aggregate effects. The model assumes that the barriers faced by some women to become firm managers increase with managerial talent, leading female-run firms to be smaller than male-run firms in equilibrium. Findings: The results show that only about one fourth of firms are managed by women and that female-run firms are approximately three times smaller than those managed by men. For Latin America, gender gaps in entrepreneurship generate a 9% loss in output per capita, entirely explained by resource misallocation and the resulting decline in aggregate productivity. This loss is 1.3 times larger than that obtained under a framework in which barriers to entrepreneurship are assumed to be independent of talent. Implications: The findings indicate that reducing gender-based barriers to entrepreneurship can improve resource allocation, increase aggregate productivity, and raise income per capita. Originality: The study quantifies the aggregate costs of gender gaps in entrepreneurship using a theoretical framework in which barriers to entrepreneurship depend on managerial talent.

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Author Biographies

Marc Teignier Baqué, Universitat de Barcelona

Professor Teignier focuses his research on macroeconomics and economic development. His work has analyzed the process of structural change and its interaction with international trade and urbanization, as well as the effects of financial development and the aggregate effects of gender inequality. He has published in journals such as the Journal of Development Economics, the Journal of Money, Credit and Banking, the Journal of Human Capital, and the B.E. Journal of Macroeconomics, among others. He currently has an article under conditional acceptance in the Review of Economic Studies.

After completing his undergraduate studies at Pompeu Fabra University in Barcelona, Professor Cuberes earned a Master's degree in Economics and a PhD from the University of Chicago. He has conducted research and taught at the University of the Basque Country, the University of Alicante (Spain), and the University of Barcelona. He has also worked as a consultant for the World Bank, the International Monetary Fund, and the Inter-American Development Bank, among other organizations.

More details about Professor Teignier's research can be found here: https://sites.google.com/view/marcteignier

David Cuberes, Maynooth University

Professor Cuberes focuses his research on urban economics, economic history, and economic growth. His work has analyzed the growth process of cities in different countries, the effects of wars on urban populations, and the factors that explain household location within a city. He has also investigated the aggregate effects of gender inequality, the relationship between democracy and growth volatility, and the demographic transition. He has published in journals such as the Economic Journal, Journal of Urban Economics, Regional Science and Urban Economics, Journal of Human Capital, and Macroeconomic Dynamics.

After completing his undergraduate studies at Pompeu Fabra University in Barcelona, Professor Cuberes earned a Master's degree in Economics and Finance from CEMFI (Madrid) and a PhD from the University of Chicago. He has conducted research and taught at Clemson University, Royal Holloway (UK), the University of Alicante (Spain), the University of Sheffield (UK), and Clark University (USA). He has also worked as a consultant for the World Bank, the International Monetary Fund, and the Inter-American Development Bank, among other organizations.

More details about Professor Cuberes' research can be found here: https://sites.google.com/site/davcuberes/

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