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

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