Editor’s note: This post was republished with permission from the Ewing Marion Kauffman Foundation’s Growthology blog.
While the entrepreneurship gender gap persists, the gap in the performance of businesses owned by female compared to males, proxied by firm revenue, has been shrinking.
With the release of the largest annual survey data of U.S. entrepreneurs, we at the Kauffman Foundation are very excited to explore important topics such as the extent of the gender gap within entrepreneurship. Here is what we have discovered from a quick analysis of the Annual Survey of Entrepreneurs (ASE) and the employer firms section of Survey of Business Owners (SBO) data. Although the ASE and SBO data differ in their sampling methodology, the SBO data are mostly comparable to the former, especially on a national scale.
1. The gender gap remains large.
As we can see from figure 1, a vast majority, nearly two-thirds of employer firms identifiable by gender are owned by male entrepreneurs. An employer firm is about three times more likely to be owned by a male entrepreneur than a female. Only about 20 percent of employer firms are owned by women and another 15 percent are equally owned by women and men.
Female-owned firms are also trailing behind on total revenue reported by such employer firms identifiable by gender (figure 2). Nearly 80 percent of total revenues are generated by male-owned firms, while 10 percent or less are generated by female-owned firms. There also seems to be little change in the trend.
2. Male-owned firms have more employees and higher average pay.
Female- and male-owned employer firms declined slightly in size, while the size of firms equally owned by males and females increased slightly (figure 3). Average pay across all gender groups is rising with male-owned firms paying substantially more than female-owned firms and firms equally owned by men and women having the lowest average pay (figure 4).
3. Male-owned firms earn more revenue on average, but average revenue of female-owned firms is on the rise.
Average revenue of employer firms owned by men has been nearly double the revenues of firms owned by women (figure 5). However, between 2012 and 2014, average revenue of male-owned firms remained approximately the same, while the revenues of women-owned firms increased by nearly 9 percent.
Male and female entrepreneurs often face very different circumstances and challenges when operating a business. Our bird’s eye view of the ASE data suggests that the gender gap remains large. However, average revenue of female-owned firms is on the rise. Dr. Alicia M. Robb and Susan Coleman recently published their highly informative book, The Next Wave, which focuses on the gender gaps in high growth entrepreneurship and equity investing.
The ASE dataset also contains important information about financing, challenges, and growth aspirations. We will explore these topics as the data become publicly available.
Inara Sunan Tareque is a research assistant in Research & Policy for the Ewing Marion Kauffman Foundation, where her work involves research pertaining to entrepreneurship, identifying and awarding grants, writing literature reviews, and performing charting and data analysis. Tareque holds a Bachelor of Arts from Grinnell College with majors in mathematics and economics, with a concentration in global development studies.