Research Proposal : Impact of self-employed women on GDP growth

Hello All,

Today’s post is the research proposal I am submitting as part of an online MOOC assignment for “Data Management and Visualization”, from Wesleyan University on the Coursera platform. This happens to be the assignment for week 1, and will form the basis for all future assignments. I had a lot of fun and learnt a lot, while reading up hundreds papers (96, to be exact) for the literature review. I also sifted through copious amounts of data from the pre-defined codebooks and the unsorted, raw data from public data-sets to short-list a bunch of topics to analyze further.

The topic that interested me is women in the labor workforce and how they affect the country’s economy. Drilling down to a niche topic took awhile, especially since the standard codebooks had scattered data. Finally, I decided to compile my own data-set which ensures that my proposal is truly unique and original. In short, spent a lot of toil, tears and sweat, (thankfully not blood) to get this proposal perfect. So without much ado, here goes:

Research Topic

Is the % of self-employed women associated with per capita GDP growth during the period 1995-2007?

Hypothesis

1. There is a positive correlation between the number of self-employed women and per capita GDP for 50 countries around the globe.
2. An increase in self-employed women also corresponds to a positive increase in per capita GDP. [Here the timeframe will be taken in sets of 4 years: 1995-1998, 1999-2002, 2003-2006 ]

Data Sources

To test these hypotheses, I have chosen to create my own data-set and codebook, compiled from the following public data-set sources:

1. Female labor participation from 50+ countries (from ILO – International Labor Organization)
2. % of women who are self-employed (from ILO)
3. GDP per capita growth (from World Bank)

The current version of the data codebook can be viewed as Anu_codebook_wentrepreneur_GDP or using the link to the author’s Github account. (1) The country and year are combined to make a unique identifier and variable named “timeframe”. Please note that I have not yet formalized the final variables and will include those for next week’s assignment.

Background & Literature review

There are numerous studies showing that an increase in the ratio of women to total labor workforce helps improve the economic conditions of the home country. A 2005 study by the World Economic Forum found a clear (and positive) correlation between sex equality by measuring economic participation, education, political empowerment and GDP per head. (2) In fact, countries where the ratios of women to men in labor force are decreasing, show faster economic growth than countries where this ratio is stagnant or low. (3)

All organizations benefit from welcoming more women in their payrolls. A study by McKinsey and Company (4) indicated that companies with more women in senior management positions showed better productivity, higher shareholder profits and generally ranked better in many other factors commonly used to measure organizational effectiveness. This shows clear evidence that having more working women benefits a country and accelerates overall growth. Recent economic reports by the World Bank, United Nations, World Economic Forum, Goldman Sachs and similar organizations show a dramatic positive relationship correlation between gender equality and countries’ economic development. The President of the World Bank Group Robert Zoellick once famously quoted gender equality as “smart economics.” (5)

Despite all these studies, little research has been done on the role of self-employed women (or women entrepreneurs, referred henceforth as “wentrepreneurs”). Despite using various search terms[a] and databases, few results cropped up regarding the topic. Most results (6) only studied the factors that encourage or discourage women from operating their own businesses. Many studies (7), (8), (9), (10) also showcase the impact of women on economic conditions showed thousands of results, but not specifically if wentrepreneurs contributed a significant share.

Entrepreneurship has been known to offer the general populace, and especially women, a viable (and long term) route to income parity, decrease household poverty and leading to overall economic growth. So it logically follows that a deeper investigation is urgently needed to determine whether female entrepreneurs truly affect or accelerate a nation’s financial growth.

The most relevant study was a joint report from 2004 by Stockholm School of Entrepreneurship, Sweden and Eindhoven University of Technology, The Netherlands (11) which showed a weak and slightly negative correlation between wentrepreneurs and GDP growth. However, this study only took into account data for the period 1974-1994 and statistics only from 21 countries were used. Given the rapid technological advances and role of internet in proliferating small business and startup success, we expect that this study may no longer be completely accurate. Since 1994, there have also been significant political and socio-economic reforms which now encourage more women to pursue higher education, enter the workforce and receive equal pay as men.

Another study was done specifically on women-owned businesses in transitional economies (12) which showcased the political and social factors that fostered an increase in wentrepreneurs and personality traits possessed by successful women candidates. However, the study was not indicative if the increase in numbers contributed to an improvement in the economy. Another 2013 study by Donor Committee for Enterprise Development investigated the change in economic empowerment for wentrepreneurs, but did not emphasize whether any positive changes that help wentrepreneurs affected the country’s economy at all. (13)

Also recent data from World Bank and ILO provide numbers from 60+ countries[b] for the period 1995-2007. So the goal of this research analysis is to extend the first study (11) based on a more recent timeframe and test if there is a positive correlation between the number of wentrepreneurs and per capita GDP for these countries.

Summary

The literature review clearly indicates that there are no recent studies on the impact of wentrepreneurs on national economic growth. Therefore, our goal is to test the hypothesis outlined before and investigate if there is any such correlation and whether this is a positive or negative relationship. This entire report can also be viewed in .pdf format as Anu_AssignmentW1

Bibliography

1. Rajaram, Anupama. Google Drive. [Online] September 18, 2015. https://drive.google.com/open?id=0B3yOOMau_pYjTlFfejZvamtERFk
2. The Global Gender Gap Report 2006. World Economic Forum. Switzerland : World Economic Forum, 2006.
3. Gender Equality in Education, Employment and Entrepreneurship: Final Report to the MCM 2012. Paris : OECD , 23-24 May 2012. Meeting of the OECD Council at Ministerial Level.
4. Women Matter 2014. GCC Women in Leadership – from the first to the norm. McKinsey & Company. 2014.
5. The World Bank and Gender Equality: At a Glance. World Bank. 2009.
6. Rajaram, Anupama. Google Search Query. (a)self employed women economy growth (b)women entrepreneurs economy growth (c)increase women entrepreneurs increase in GDP (d)women entrepreneurs GDP (e)women entrepreneurs GDP growth income OR “better economy” (f)women self-employed GDP economy growth.
7. Maximising women’s contribution to future economic growth. s.l. : UK Women’s Business Council, 2015.
8. Philip Wales & Ciaren Taylor, Office of the Chief Economic Adviser. Economic Review. Office for National Statistics. April 2014.
9. Katrin Elborgh-Woytek, Monique Newiak, Kalpana Kochhar,. Women, Work, and the Economy: Macroeconomic Gains From Gender Equity. Strategy, Policy, and Review Department and Fiscal Affairs, INTERNATIONAL MONETARY FUND . September 2013.
10. Löfström, Åsa. Gender equality, economic growth and employment. Swedish Ministry of Integration and Gender Equality. 2009.
11. Terrence E. Brown, Jan Ulijn. Innovation, Entrepreneurship and Culture: The Interaction between Technology, Progress and Economic Growth. s.l. : Edward Elgar Publishing Limited, 2004.
12. Women-owned family businesses in transitional economies: key influences on firm innovativeness and sustainability. Lisa K Gundry, Jill R Kickul, Tatiana Iakovleva, Alan L Carsrud. December 2014, Journal of Innovation and Entrepreneurship.
13. Wu, Diana. Measuring Change in Women Entrepreneur’s Economic Empowerment. Women’s Entrepreneurship Working Group (WEDWG), Donor Committee for Enterprise Development (DCED). 2013.

Footnotes

[a] Technical search queries and phrases are provided in the bibliography.

[b] Although, the raw data is from 190 countries across the globe, some countries had to be dropped due to missing values. Even after cleaning the data, we see values for 60+ countries spread equally across all 6 continents.