Gendered Social Norms and Microenterprise Efficiency: Evidence from Workspace Choice and Household Dynamics in Mexico

In recent decades, the Mexican microenterprise sector experienced declining productivity and increasing feminization. Using nationally representative data, this article estimates microenterprise efficiency and finds that owner gender significantly predicts efficiency. The study examines the gender efficiency gap using the Kitagawa-Oaxaca-Blinder decomposition to examine differences in endowments and returns to endowments. It includes traditional explanatory variables for firm performance, including owner education, age, motivation, and industry, while considering how gender norms may influence efficiency through marital status, responsibility for unpaid household work, and workspace. Findings show that differences in returns to endowments, rather than differences in endowments themselves, explain almost the entirety of the gender efficiency gap. Gendered social norms regarding women's role in the household help explain why a much larger share of women-owned microenterprises operate from home, as it allows them to pursue paid work for their business and unpaid household work but adversely impacts their efficiency.