Assessing gender equity among businesses in Ethiopia: implications for gender profitability gap

Evidence shows that gender inequality characterizes the enterprise landscape in sub-Saharan Africa, with women disproportionately concentrating in low return businesses. With the literature leaning toward comparing male- and female-owned enterprises and among females in female- and male-dominated sectors, evidence of a gendered profit gap within male-dominated sectors is scanty and mixed. This study evaluated the gender profitability gap and identified drivers of female participation in male-dominated and high-return sectors using the Ethiopian Socioeconomic Survey 2018/19 dataset. The study did not find evidence of gender gap in profit both before and after controlling for other factors affecting enterprise profit. Our result shows that women with larger households, a longer duration of migration, and better assets are more likely to engage in male-dominated sectors, whereas those who are widowed/divorced/separated and have small children are less likely to engage in such sectors. Larger households and longer durations of migration are more likely to be associated with female engagement in high-return sectors, whereas home-based business is less likely. From this, females in male-dominated sectors tend to have better support systems and lower vulnerabilities. Thus, the findings of the study warrant interventions in access to information on business opportunities, workspace, and paid care services.