Female entrepreneurship in the U.S. 1982–2012: Implications for welfare and aggregate output

The number of women-owned businesses in the U.S. has soared over the last several decades. In 1982 less than 13 percent of businesses were majority-owned by women. By 2012 this number reached 40 percent. This and other evidence suggests that women have faced significant barriers to running businesses. Interpreted through the lens of a model of entrepreneurship, observed trends imply substantial declines in several barriers facing female entrepreneurs. Together, these changes account for almost 4 percent of observed growth in aggregate output and a 3 percent increase in workers’ consumption-equivalent welfare since 1982. By 2012, lower barriers increased the welfare of female entrepreneurs by a dramatic 116 percent, while lowering the welfare of male entrepreneurs by 5 percent. These impacts are in addition to any gains to workers from declining labor-market barriers.