Published on Let's Talk Development

Are certain sectors more favorable to women?

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There is mounting consensus that gender equality generates both substantial equity and efficiency gains. However, there is still much to uncover about both the current state of gender equality in developing economies and the accompanying measures that should receive attention. Should the focus be on simple labor participation, or wages? Do any of these measures capture female empowerment? Data availability plays a substantial role in these decisions. For instance, given the dearth of gender wage data in developing economies, a lot of attention may shift to labor force participation as a convenient measure.  A primary concern in the feminist literature regarding participation measures is that even though more females may join the labor market there may be little improvement in their livelihoods. There is some evidence that women tend to be employed in the informal sectors which tend to have low wages and are more economically vulnerable. Thus a more informative measure could be one that attempts to capture female economic empowerment. Using this measure, the interesting question would then be for example, in what sectors of the economy are women typically more empowered?

My co-author and I, being extensively familiar with Enterprise Surveys, were aware of a notable micro-level measure of female empowerment that could be uncovered from the surveys. The survey question, whose respondents are typically owners and managers of establishments, is simply “Is the top manager female?” The surveys have the advantage of pursuing a common methodology thus allowing for cross country comparisons. Only formal private firms in the manufacturing and services industries are surveyed, thus not much can be inferred about the informal sectors or excluded sectors such as agriculture. Using female management data for a cross-section of over 31,000 firms across 87 developing economies, we set out to uncover whether certain sectors tended to have more top female managers than the others.
What did we find? In our sample about 19 percent of firms have a top female manager, which would mean that over four-fifths of the 31,000 firms in our sample have a male top manager. We found that a service sector firm has a 2.6 percentage point higher likelihood of having a female manager over the manufacturing sector. In many ways, we were not surprised by this result. Certain types of occupations in services sectors may be perceived to be more female friendly, and it would not be surprising for women to attain top manager status in such jobs. However, what did surprise us was that the result is entirely driven by one specific sub-sector of services – the retail sector. There is a large 8.1 percentage point increase in the likelihood of a firm having a female manager as we move from the rest of the economy to the retail sector. In fact, there is no significant difference between manufacturing and other (than retail) service sectors in the gender of the top manager. Looking deeper within the retail sector, we find that small firms and firms in small cities are more likely to have a female manager. Regarding sectors lacking female top managers, unsurprisingly construction was the one sector where we found very little presence of female managers. At least to some degree our study accounts for country specific idiosyncrasies, business environment and trade factors. The details of the findings can be found in the full study located here.
What policy implications can we garner from these results? Although our study is exploratory in nature and thus we do not really put forth a causal argument, we still do find fairly consistent patterns. One implication maybe that policy that improves the retail sectors in terms of business environment or access to finance may end up improving the conditions for many women. It may also be that policies that benefit small firms and increase public amenities in small cities may increase the presence of females in managerial positions. Of course there is the question of whether female employment in the retail sector should be encouraged, which is a much broader discussion and beyond the scope of our study. However, we do hope that our findings at least provide ample motivation to investigate factors that influence female empowerment in terms of presence in top managerial positions.

Source: World Bank Enterprise Surveys for 87 countries



Asif Islam

Senior Economist, Office of the Chief Economist, Middle East and North Africa Region, The World Bank

Mohammad Amin

Private Sector Development Specialist

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