Unraveling gender differences in entrepreneurial exits: The role of human capital and family situation during an unprecedented crisis

Abstract

This study applies a gender role perspective to delve into disparities in entrepreneurial exit decisions during unprecedented crises such as the COVID-19 pandemic. The paper examines how human capital and family dynamics—encompassing family income and size—interact with evolving social roles and responsibilities. Using multinomial estimation techniques and Global Entrepreneurship Monitor survey data from Chile, our findings reveal that women entrepreneurs display a higher likelihood of business exits compared to their male counterparts. Further analysis with moderating variables shows that the gender coefficient is not significant and unveils a non-linear pattern tied to educational backgrounds. Specifically, women with elementary education are prone to discontinuing businesses due to the COVID-19 crisis, with a similar—though weaker—tendency observed among women with tertiary education. Women with medium education levels do not significantly differ from men in terms of business closures due to COVID-19. Additionally, family size disproportionately affects women, amplifying the likelihood of business exits during the COVID-19 crisis compared to men. The paper offers actionable insights for researchers and policymakers, emphasizing the pressing need to augment women's entrepreneurial resilience in the face of unforeseen crises.