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The importance of capital in closing the entrepreneurial gender gap: a longitudinal study of lottery wins

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  • Flèche, Sarah
  • Lepinteur, Anthony
  • Powdthavee, Nattavudh

Abstract

Would improving women's access to capital reduce the gender entrepreneurial gap? We study this issue by exploiting longitudinal data on lottery winners. Comparing between large to small winners, we find that an increase in lottery win in period t − 1 significantly increases the likelihood of becoming self-employed in period t. This windfall effect is statistically the same in magnitude for men and women; the top 25% winners (an average win = £831.16) in year t − 1 report a significant increase in the probability of self-employment in year t by approximately 2 percentage points, which is approximately 20–30% of the gender entrepreneurial gap. These results suggest that we can causally reduce the gender entrepreneurial gap by improving women's access to capital that might not be as readily available to the aspiring female entrepreneurs as it is to male entrepreneurs.

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  • Flèche, Sarah & Lepinteur, Anthony & Powdthavee, Nattavudh, 2021. "The importance of capital in closing the entrepreneurial gender gap: a longitudinal study of lottery wins," LSE Research Online Documents on Economics 112789, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:112789
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    More about this item

    Keywords

    BHPS; gender inequality; lottery wins; self-employment;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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