Women on the Front Line: The Growth of SMEs during Crises

ABSTRACT

We investigate the relationship between women's participation and the growth of 10,445 Brazilian SMEs operating in a widespread economic crisis. Our study is motivated by the disproportional unemployment scores observed among women during the COVID19 pandemic. We used stepwise regression and conditional process analysis to test all our hypotheses. We found that an increase of women employees in the total workforce of SMEs boosts their growth. This indicates that the disproportional spikes in women's unemployment observed during recessions are not only unjust but also harmful to SMEs striving to weather crises. We also identified that these firms grow further by increasing women employees' wages and job tenure, by preferring more women with higher levels of education and longer job tenure, or retaining more educated women who are better paid at the same time. Our findings rebuke the rationale behind the disproportional layoffs of women workers in times of crisis. They indicate that SMEs should sustain their female workforce to increase chances of weathering widespread economic crises. Our results can help alleviate the predicament experienced by women workers during economic crises, and support policies designed to reduce the persistent gender gap in businesses.