Childcare, COVID-19 and Female Firm Exit : Impact of COVID-19 School Closure Policies on Global Gender Gaps in Business Outcomes

This paper estimates the impact of a large negative childcare shock on gender gaps in entrepreneurship using the shock created by national COVID-19 school closure policies. The paper leverages a unique data set of monthly enterprise data collected from a repeated cross-section of business owners across 50 countries via Facebook throughout 2020 and in 2021. The paper shows that, globally, female-led firms were, on average, 4 percentage points more likely to close their business and experienced larger revenue declines than male-led firms during the COVID-19 pandemic in 2020 (male firms closed at a rate of 17 percent in 2020, and 12 percent in 2021). The gender gap in firm closures persisted into 2021. The closing of schools, a key part of the care infrastructure, led to higher business closures, and women with children were more likely to close their business in response to a school closure policy than men with children. Female entrepreneurs were found to take on a greater share of the increase in the domestic and care work burden than male entrepreneurs. Finally, the paper finds that women entrepreneurs in societies with more conservative norms with respect to gender equality were significantly more likely to close their business and increase the time spent on domestic and care responsibilities in response to a school closure policy, relative to women in more liberal societies. The paper provides global evidence of a motherhood penalty and childcare constraint to help explain gender inequalities in an entrepreneurship context