ESSAYS ON INTERLINKAGES AMONG WOMEN INFORMAL ENTREPRENEURS, EMPOWERMENT AND SOCIAL CAPITAL

Abstract

informal sector stands as a cornerstone of the Indian economy, providing a vital lifeline, especially in regions with limited formal employment avenues. The informal economy accounts for approximately 80 per cent of non-agricultural employment and 92 per cent of workforce in India (ILO, 2016; 2022). Women's involvement remains notably low in this sector despite constituting nearly half of the nation's population. Studies, including the NSS time use survey 2019, underscore the significant gender disparities in economic activities, with women predominantly allocating their time to unpaid domestic chores rather than professional pursuits. This skewed distribution of labour is further highlighted by statistics indicating that the overwhelming majority of employed women are engaged in informal sector activities. Research conducted by OXFAM in 2022 highlights that approximately 88 percent of women's employment occurs within the informal sector. This trend persists across regions, with women being more inclined to participate in the informal sector compared to men. Consequently, a critical imperative exists to explore women's participation in informal entrepreneurship comprehensively. Such an investigation is essential for elucidating the underlying dynamics driving women's engagement in entrepreneurial ventures within the informal economy, as well as for identifying the factors that either facilitate or impede their involvement in entrepreneurial activities. This doctoral thesis delves into the intricate interplay between women entrepreneurs operating within the informal sector, their empowerment status, and the pivotal role of social capital. Within a burgeoning emphasis on women's economic participation, the thesis serves as a compendium of essays exploring various dimensions of women's entrepreneurship. The second chapter of the thesis meticulously examines the dynamics of women entrepreneurs entrenched in the informal sector, with a particular focus on delineating between 'Necessity' and 'Opportunity' entrepreneurship paradigms. Leveraging an array of quantitative methodologies, including crosstabulation, logit regressions, and pooled cross-section analyses, this segment draws insights from nationally representative data derived from the NSS 67th and 73rd rounds. By scrutinizing data from 2010-11 to 2015-16, the chapter unravels the intricate tapestry of informal entrepreneurship, elucidating gender-specific patterns across sectors, locations, states, and regions. The findings underscore a modest uptick in women entrepreneurship over the observed five-year period, primarily attributable to a burgeoning presence within the manufacturing sector. However, the analysis reveals a disproportionate prevalence of 'Necessity' entrepreneurship among women, with a substantial proportion engaged in traditional activities within household settings, thereby bespeaking the pervasive marginalization women face in this sector. In the third chapter, an in-depth exploration is conducted into the determinants shaping the landscape of necessity and opportunity entrepreneurship among women. Leveraging the same dataset utilized in the previous chapter, the analysis uncovers compelling insights into the structural dynamics influencing entrepreneurial pursuits across gender lines. Notably, the examination reveals a pronounced disparity in the Gross Value Added (GVA) between male and female entrepreneurs, underscoring the need to address gender-based disparities within the entrepreneurial ecosystem. Furthermore, the study identifies opportunity entrepreneurship as a pivotal factor in mitigating this gender performance gap, thereby advocating for concerted efforts to foster an environment conducive to entrepreneurial opportunities for women. Employing logistic regression models with specification of relevant variables, the analysis unveils intriguing patterns in the likelihood of women engaging in necessity entrepreneurship across geographical and social strata. Specifically, females exhibit a heightened propensity for necessity entrepreneurship in non-southern states and rural locales, with a notable concentration observed among individuals operating within household settings. Additionally, individuals occupying lower rungs of the social caste hierarchy demonstrate an elevated likelihood of embarking on necessity-driven entrepreneurial ventures. These findings underscore the pervasive marginalization experienced by women entrepreneurs within the informal sector, highlighting that women are more likely to be necessity entrepreneurs than their male counterparts. In the subsequent chapter, an in-depth examination is conducted to assess the influence of empowerment on women's entrepreneurship. This multifaceted objective is dissected into two primary dimensions, focusing on both individual women's empowerment and the empowerment legacy of previous generations on women's entrepreneurial endeavours. Leveraging data from the India Human Development Survey (IHDS-II), the analysis employs a composite empowerment index, incorporating five key dimensions pertaining to cultural and societal aspects. The insights gleaned from chapters two and three underscore its significance. The empowerment index comprises measures of household and economic decision-making, freedom of mobility, social participation, and economic freedom. Strikingly, the findings reveal that a significant proportion of women entrepreneurs, approximately 62 per cent, do not demonstrate signs of empowerment, with less than 2 per cent classified as highly empowered. However, despite these disparities, regression analyses (see Table 4.7). elucidate a discernible positive correlation between empowerment and women's participation in entrepreneurship. Furthermore,the study unveils the noteworthy influence of maternal empowerment on women's entrepreneurial pursuits, albeit with a moderate effect size. These findings underscore the pivotal role of empowerment initiatives in fostering increased participation of women in entrepreneurial activities. In the fifth chapter, the focus shifts towards exploring the critical role of household social capital in shaping women's entrepreneurship. The primary objective of this chapter entails a comprehensive investigation into the influence exerted by household social capital on women's entrepreneurial endeavours, particularly within the informal sector. The concept of social capital is multifaceted, particularly in entrepreneurship literature, where it is often categorized into bridging, bonding, and linking social capital. Therefore, the analytical framework unfolds through two distinct models - the first model scrutinizes the impact of composite social capital. In contrast, the second model dissects three specific dimensions of social capital, each contributing independently to its effect on women's entrepreneurship. Our empirical findings unveil that overall social capital positively influences women's participation in informal entrepreneurship. However, a nuanced examination reveals a significant negative impact on women's entrepreneurship, contrary to expectations, upon disaggregating bridging and bonding social capital separately. In contrast, linking social capital emerges as a crucial factor associated with increased women's participation in entrepreneurial activities, underscoring its significance as a facilitator for women entrepreneurs within the informal sector. The culmination of our research journey entails the recognition of significant gaps within existing secondary datasets in India, particularly concerning variables such as the motivation behind initiating businesses, empowerment indicators, and social capital specific to women entrepreneurs. A field survey was conducted in Bihar to address this void comprehensively, employing a semi-structured questionnaire as the primary data collection tool. This survey offers a more nuanced and comprehensive understanding of women entrepreneurship in the region. It achieves this by collecting data on owner demographics, motivations for business startup, empowerment indicators—including mother empowerment—and evaluating levels of social capital. The sampling design for this study employs a multi-stage approach, utilizing the Sixth Economic Census (2013-14) as the sampling frame. The field observations unveiled a predominant trend wherein women predominantly engage in informal entrepreneurship out of necessity, primarily driven by the imperative to fulfil household requirements. A notable concern identified through our analysis is the prevalence of proxy entrepreneurship, wherein less than half of women entrepreneurs assume sole responsibility for decision-making regarding their enterprises and income. Moreover, our examination revealed substantial disparities in empowerment levels between necessity and opportunity entrepreneurship, with the latter demonstrating higher levels of empowerment potential. Additionally, our study highlights the relatively low magnitude of social capital among necessity and opportunity entrepreneurs, albeit with the latter group exhibiting slightly larger social capital. Drawing upon these findings, the concluding chapter presents a set of policy recommendations to address the identified disparities and foster an enabling environment for women entrepreneurs within the informal sector. Furthermore, the chapter delineates the future scope of research in this domain, outlining potential avenues for further inquiry and exploration to advance our understanding and support for women's entrepreneurship in India.