Pandemic hurt female business owners

The Covid-19 pandemic stalled women’s progress in self-employment and small business ownership, according to a new report from TD Economics.

The pandemic had a broadly negative effect on self-employment but the impact on women has been more severe, the report said.

Women currently account for 37.3% of self-employed workers and own less than 20% of small businesses. Prior to the pandemic, self-employment was on the rise among women, it said.

“The pandemic brought this trend to a halt,” TD said. “Self-employment among men recovered quickly since the onset of the pandemic, but less so for women, thus far.”

The report points to a number of reasons for the disparity, including that female-owned businesses are disproportionately in the hard-hit services sector, and that they tend to be smaller (smaller firms had a tougher time surviving the pandemic).

Differences in social roles are likely a factor, too.

“With women still shouldering the bulk of childcare duties, the pandemic closures of schools and daycares likely proved an insurmountable challenge for many self-employed women with younger children,” the report said. “Many of whom likely had to stop their work to manage full-time child care or virtual schooling.”

Looking ahead, there is reason for hope that self-employment among women will improve in the months ahead, the report said.

“We are still in the early days of the recovery from the pandemic and it is likely that as the hardest hit sectors of the economy continue to rebuilt, the pre-pandemic trend of women gaining ground in self employment will reassert itself,” it said.

Improving female entrepreneurship may prove tougher, TD said, given that, along with pandemic factors, there are more entrenched obstacles to female business ownership.

“There is evidence that shows the lower tendency for women to consider entrepreneurship emerges quite young,” the report said, noting that teenage girls are less likely than boys to aspire to entrepreneurial futures, and are less likely to participate in voluntary entrepreneurship opportunities.

“Efforts to change these biases through education or exposure to role models clearly needs to start relatively early to increase the likelihood women pursue entrepreneurship,” the report said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.