How public health policies helped women-owned businesses survive the pandemic.
The COVID-19 crisis, as unprecedented as it was, is not unheard of in two fundamental ways. First, the pandemic adversely affected minorities as well as small businesses. It also exacerbated existing income inequalities. The second was the wide range and quality of responses to public policy issues across countries. For example, the policies of President Donald Trump in the United States, which downplayed health risks, contrast sharply with China’s strict containment measures. This exemplifies the wide global divergence in the public response to the pandemic.
These two main characteristics of the pandemic are they related? Yes. Our recently published paper covered the effect of public policies on gender-related differences and enterprise performance. We examined whether public policies that effectively reduced the performance gap between male and female-owned enterprises could be linked to a minor cross-country variation of economic and public health policy responses.
THE PANDEMIC HUT WOMEN-OWNED BRANDS MORE
Our first task was to determine if women-owned businesses outperformed men-owned companies during the pandemic’s peak (March 2020 – February 2023). There has been a lot of evidence that the labor market has harmed women entrepreneurs and workers since the pandemic. This study provides a systematic analysis of the performance differences between businesses that considered pre-pandemic performance variations. This analysis was based on monthly data from the World Bank’s COVID-19 Tracking Database. We combined this with the Enterprises Surveys Database to measure pre-pandemic performance. These datasets combined covered over 20,000 small and medium enterprises in 38 countries.
The results also showed that monthly sales growth during the pandemic decreased by three percentage points in women-owned businesses. This was since women-owned enterprises had fewer business closures than average firms, 17 percent more.
These results shouldn’t be surprising, considering the unique tradeoffs that the pandemic created between economic risk and health. This phenomenon is known as the “life and livelihoods conundrum.” Given the differences in risk perceptions and work-life balances between men and women entrepreneurs, it was probably not surprising that women-owned businesses were more affected by the pandemic.
This is partly due to containment measures like stay-at-home orders or school/daycare closures that have increased ” unpaid ” home production. Homework, education, and child-care activities are all performed at home. In addition, the patterns of labor division, which assigned more domestic responsibilities to women, led to a blurring of the line between work and family. This resulted in women entrepreneurs taking on greater family responsibilities.
Another factor was that women entrepreneurs were more likely to emphasize economic risks than health risks. Large-scale surveys from many countries showed that while women perceived the pandemic more as a health risk, men suffered significantly higher morbidity or mortality from COVID-19. Our analysis revealed that the significant gender gap in performance could be explained by more outstanding familial obligations and increased sensitivity to health risks.
FEMALE-HEADED FIRMS ARE MORE IMPORTANT IN QUALITY PUBLIC POLICIES
Then, we tested whether policies in both economic support and public health helped reduce the gender gap in economic performance. The COVID-19 Government Response tracker, compiled by Oxford researchers, provided monthly data series that measured the strength of financial support and public health policies. After accounting for pre-pandemic performance gaps, we found that the gender gap in performance was significantly reduced by public health policies, such as contact tracing and testing.
Sound public health policies may help address the root problems that held back women entrepreneurs in the aftermath of the pandemic. For example, the containment policies that allowed schools to reopen and daycare centers to be reopened helped women entrepreneurs restore their work-life balance. This was a significant improvement over the situation for men. In addition, these policies can reduce gender gaps in risk perception, provide reliable and timely information on public health and extend access to essential services.
Surprisingly we did not find any evidence that economic support policies had a more significant impact on the gender gap in business performance. Our measurements’ poor precision, which makes it difficult to track the amount of economic support given to the private sector, could explain this. The results could indicate that financial aid was less effective than public health policies to address the underlying issues of women entrepreneurs, given that they were compared with other measures. Recent studies have explored the possibility that economic support was not distributed in a favorable way to women and other socially disadvantaged groups.
GENDER IMPORTS IN BUSINESS – AND EVEN MORE IN BAD TIMES
Given the massive scope of the COVID-19 pandemic–and its potentially enduring repercussions–understanding the distributional implications is critical for informing future policy and practice. These robustness tests proved that our results were durable. They highlight the impact of the pandemic on women entrepreneurs and the importance of public health policies to reduce them. These results also emphasize the importance of systematically investigating the gendered effects of COVID-19 and the associated policy responses.