The pandemic has been anything but business as usual for women entrepreneurs. Women entrepreneurs have sacrificed more time than men to undertake unpaid care during COVID-19, and their businesses have received less public support than those run by men.
Unsurprisingly, this uneven support and uneven share of care have gone hand in hand with a greater risk of women-led businesses closing down, a review of new data by World Bank economists shows. This has raised concerns that COVID-19 could undo years of progress for women entrepreneurs. Setbacks from COVID-19 for women entrepreneurs in low- and middle-income countries have been severe.
The World Bank’s Enterprise Survey dashboard (March 2021 version) indicates that women-led businesses have generally seen larger declines in sales and profits during the COVID-19 pandemic, and they have been more likely to close down (at least temporarily) in 12 out of 18 countries. In 11 out of 18 countries women-led enterprises reported shorter survival durations than men-led enterprises. Similarly, a forthcoming World Bank paper, which combines Enterprise Survey and Busines Pulse Survey data for an in-depth study of 49 mostly low and middle-income countries, shows that women-led businesses were disproportionately affected by the pandemic, especially among micro-businesses and businesses in the hospitality industry.
To understand how the COVID-19 pandemic has impacted women-led businesses, let’s start with some startling facts from a recent review of new data indicating that women in the workforce, including entrepreneurs, have suffered major setbacks in three key areas.
First, in many countries, sectors of the economy that employ a disproportionate share of women have been hardest hit, including tourism, hospitality, and retail. A study in Latin America and the Caribbean shows that female-intensive sectors—trade, personal services, education, and hospitality— explain 56 percent of all job losses between May and August 2020. The Future of Business Survey shows that women-led firms are concentrated in consumer-facing sectors (e.g. services, hospitality, education and child care services) where the pandemic shock was hitting the hardest, which is probably one of the reasons why such firms were found more likely to be closed than men-led firms during the early stages of the pandemic. Research by the World Bank’s Africa Gender Innovation Lab also highlights that women entrepreneurs in Sub-Saharan Africa are more often engaged in low paying activities than men entrepreneurs, which limits their saving capacity and therefore their resilience when faced with shocks.
Second, women have shouldered a disproportionate burden of unpaid work. The economic and social impact of this is pronounced. Even prior to the pandemic, UN estimates, based on data for six countries, showed that assigning women’s unpaid work a monetary value would add between 10 and 39 percent to a country’s GDP. This situation has worsened during COVID-19. The global data and analyses generated over the last 12 months confirm that women were more likely to report an increase in time spent on unpaid care and domestic work due to COVID-19. They were also more likely than men to report being responsible for unpaid childcare, unpaid adult care, and unpaid domestic work. Women, whether employees or entrepreneurs, paid a high price for shouldering this burden. In the Future of Business Survey, female business leaders were around 10 percentage points more likely than male business leaders to report that caring for children, home schooling, and household chores were affecting their ability to focus on work.
The third setback has been less support for women entrepreneurs than for businesses run by men. The analysis of Business Pulse and Enterprise Survey data shows that women-led business, particularly micro-enterprises, were less likely to report access to public support than men-led businesses, even though they were more negatively affected. In Ethiopia, while women-owned businesses were disproportionally affected by the COVID-19 pandemic, less than 1 percent received any type of government support during the first few months of the pandemic.
While more research is needed to gauge if these setbacks will be short-term or longer-lasting, support is critical in the recovery phase. The WBG has identified three specific areas where greater efforts are needed (see The World Bank’s Female Entrepreneurship Resource Point and the priority policy actions outlined in Building Back Better from COVID-19: Boosting Women’s Entrepreneurship).
To begin with, finance is critical for women-led businesses to not just survive but to thrive. To that end, the World Bank Group announced two new initiatives to improve access to start-up financing and e-commerce markets for women entrepreneurs, at the Women Entrepreneurs Finance Initiative (We-Fi) Middle East and North Africa Summit in 2020.
Next, more investment is urgently needed to increase access to affordable and quality childcare. As highlighted in a recent World Bank report, investments in childcare are a promising avenue to enhance women’s labour force participation and productivity. The pandemic further reinforced this message, as families all around the world have been struggling to balance work and childcare at times when schools and childcare centres were largely closed.
Finally, more needs to be done to remove legal obstacles standing in the way of women entrepreneurs. As highlighted by World Bank Group’s Women, Business and the Law 2021 report and database, many laws – such a s legal restrictions on owning and managing property or opening a bank account – continue to hamper women’s ability to set up, operate and grow a business.
The enormous setback driven by the pandemic calls for redoubled efforts not only to close gender gaps, but to ensure they do not widen. This crisis has laid bare gender inequalities in entrepreneurship which remain unfinished business.
We need healthier air for a healthier planet
Air pollution represents the world’s leading environmental risk to health, costing the globe an estimated $8.1 trillion in 2019 and killing an estimated seven million people every year. This is about 6.1 percent of global gross domestic product (GDP).
Air pollution is also deadly, causing or contributing to heart attacks, strokes, lung cancer, and respiratory diseases and killing an estimated seven million people every year – with about 95 percent of these deaths occurring in low- and middle- income countries. COVID-19 is only making matters worse, with research finding links between air pollution and COVID-19 hospitalizations and deaths.
More than 90 percent of the world’s population lives in areas where pollution levels exceed World Health Organization guidelines. Exposure to PM2.5, fine inhalable aerosol particles that are harmful to human health, is five to ten times higher in South Asia, the Middle East, and Africa than in North America.
As such, tackling air pollution represents an obvious component of the World Bank’s mission to eradicate poverty and promote shared prosperity. What is less obvious, however, is what, exactly, can be done to address this problem.
In recognition of the second annual United Nations International Day of Clean Air for blue skies, we are calling on policymakers and development partners to answer this call by considering three priorities that can help clear the air and save lives.
1. Improve availability of data on air quality
The first step toward reducing air pollution is identifying where the problems are, their causes, and how bad the problems actually are. Ground-level monitors represent a key instrument in this process. Unfortunately access to these differs greatly across the world. High-income countries, for example, have one monitor for every 370,000 people while low-income countries have just one for every 65 million!
In response to this challenge, the World Bank supports the expansion of ground-level monitoring in underserved regions. Recent research shows that satellite technology cannot replace monitors on the ground in low- and middle-income countries. Recognizing this, the World Bank is supporting the development of environmental information systems which, in places like Peru, for example, includes the expansion of the air quality monitoring network to six new cities and new systems to disseminate information on environmental quality to the public.
2. Prioritize key sources of air pollution, notably coal-fired power plants and diesel-fueled vehicles
Building on the need to collect data, we also need to ensure that this data is utilized to underpin actions that can be taken to prioritize key sources of air pollution.
Recent World Bank research on the health effects of different sources and chemical compositions of air pollution concluded that emissions from coal-fired power plants and diesel vehicles are particularly toxic to humans and are most consistently associated with heart attacks. Many of these same leading air pollutants also contribute to climate change and are emitted from the same sources – meaning our efforts to manage air quality can have the knock-on effect of also contributing to our climate goals. An integrated approach to both the air pollution and climate crises can produce win-win solutions for human health.
An example of the work have done in this direction can be found in the Hebei Province of China, where the World Bank has been supporting officials to target diesel and coal emissions, as well as industrial emissions, in an effort to reduce concentrations of PM2.5. Hebei’s annual average PM2.5 concentration level decreased more than 40 percent over a six-year period. Deploying cleaner stoves in two of the region’s cities alone contributed to a reduction of annual carbon dioxide emissions equivalent to taking 1.2 million passenger vehicles off the road every year.
3. Address air pollution across boundaries.
Air pollution does not respect jurisdictional boundaries, making the need for regional cooperation on this issue essential. Although air pollution has typically been considered a problem of cities and urban areas, we now know from our work in China and India that pollutants outside of city lines can also contribute to poor urban air quality. For example, the use of nitrogen-based fertilizers, the burning of solid wastes, and the existence of crop residues in agriculture can be sources of air pollution. In addition, naturally occurring dust, which can be increased through land, water, and farming practices, also travels great distances across countries through sandstorms and wind and has been shown to pose similar health threats to other types of particulate pollution. By taking a unified approach, policymakers can prioritize actions that will benefit people in their own countries, as well as in neighboring ones.
Looking ahead
As countries continue to grapple with the health, social, and economic costs of air pollution, they would be wise to take a broad and inclusive approach to these challenges – focusing on the abovementioned areas, as well as other priority sectors and actions. For example, over the last five decades the World Bank has provided nearly $4.4 billion in financing to the Mexico City Metropolitan Area for projects spanning air quality management, transportation, energy, and other sectors – contributing to decreases in particulate matter pollution by more than 70% during this period.
Exacerbating these challenges are the ongoing COVID-19 pandemic and the ever-present reminders of climate change. However, by taking steps to both identify the problems of air pollution as well as solutions to these problems, countries can go a long way toward overcoming all of these collective challenges – which offers the very tangible benefit of improving the health of their people, the strength of their economies, and the overall condition of planet Earth.
