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The Policy Research Working Paper Series disseminates the fndings o work in progress to encourage the exchange o ideas about development issues. An objective o the series is to get the fndings out quickly, even i the presentations are less than ully polished. The papers carry the names o the authors and should be cited accordingly. The fndings, interpretations, and conclusions expressed in this paper are entirely those o the authors. They do not necessarily represent the views o the International Bank or Reconstruction and Development/World Bank and its afliated organizations, or those o the Executive Directors o the World Bank or the governments they represent.
This paper analyzes data rom a randomized experimenton mean returns to capital in Sri Lankan micro-enterprises. The fndings show greater returns amongmen than among women; indeed, returns were notdierent rom zero or women. The authors exploredierent explanations or the lower returns amongemale owners, and fnd no evidence that the gendergap is explained by dierences in ability, risk aversion,or entrepreneurial attitudes. Dierential access tounpaid amily labor and social constraints limitingsales to local areas are not important. However, there isevidence that women invested grants dierently rommen. A smaller share o the smaller grants remainedThis paper—a product o the Finance and Private Sector Team, Development Research Group—is part o a larger eort inthe department to study microenterprise dynamics. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The author may be contacted at email@example.com the emale-owned enterprises, and men were morelikely to spend the grant on working capital and womenon equipment. The gender gap is largest when male-dominated sectors are compared with emale-dominatedsectors, although emale returns are lower than malereturns even or emales working in the same industriesas men. The authors examine the heterogeneity o returnsto determine whether any group o businesses ownedby women beneft rom easing capital constraints. Theresults suggest there is a large group o high-return maleowners and a smaller group o poor, high-ability, emaleowners who might beneft rom more access to capital.