The effect of relieving time constraints on the business performance of women-owned businesses: A field experiment

Women business owners typically earn less than their male counterparts. Previous research has shown that unconditional cash transfers increase business performance for men but not women. One possible explanation is that female business owners may face unique constraints and, as a result, may not spend the unconditional cash transfer on their business. In this paper, I test whether providing time-saving services to women-owned businesses can boost their performance. Unlike cash, this intervention is not transferable to other household members. I reanalyze data from a field experiment, in which working mothers in Kenya were randomly assigned to receive cash, time-saving services (free meals and laundry), or to a control group. I focus on a subsample of working mothers who are business owners (N = 557). My results show that those who received time-saving services reported a 70.4 % increase in revenue compared to the control group. In line with prior findings, cash recipients did not outperform the control group. The cash was frequently spent on household expenses like food and school fees, potentially explaining its failure to increase revenues. These findings suggest that time-saving interventions may effectively contribute to closing the gender gap in business performance by alleviating burdensome chores that disproportionately affect women. My study highlights the potential impact of targeted interventions to boost the performance of women-owned businesses, emphasizing the need for nuanced approaches to foster inclusive business environments worldwide.

Significance statement

Research suggests that providing cash to business owners increases business performance for men but not women. I propose and show evidence that cash interventions may not benefit women as much as men due to gender-specific expectations and constraints – like higher chore demands – that cash transfers do not directly address. In this paper, I test an alternative intervention that directly addresses these gendered time constraints: time-saving services. Analyzing data from a previously run field experiment, I show that small business owners who receive time-saving services report a 70.4 % increase in earnings compared to those who receive cash. My paper provides some of the most rigorous evidence to date showing that time-saving interventions such as meal and laundry services may effectively narrow the gender gap in business performance. Such insights could help individuals, policymakers, and organizational leaders design policies to close the gender gap in business performance by removing the chore burdens that uniquely affect women.