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Women own more than half of all micro, small, and medium enterprises in Indonesia. But of the estimated 22–33 million businesswomen in the country, most operate informal unregistered microenterprises, with significantly fewer assets and profits than men’s.
The stark gender inequalities in entrepreneurial ventures are evident in our baseline analysis of women and men entrepreneurs in East Java.1 That analysis showed that business assets and outcomes are skewed 2 to 1 in favor of the men. Only 32% of the observed gap in earnings is explained by differences in characteristics (age, marital status, education, cognitive ability, risk taking, and business and household assets) that give men entrepreneurs a headstart over women.2 So, to unlock these women’s economic potential, policies must go beyond equalizing characteristics between men and women to addressing social customs and gender discrimination in service provision that tilt business environments in favor of men.