Eight out of 10 women entrepreneurs are informal in Mexico,
when formalized they would have more benefits
In Mexico, eight out of 10 women entrepreneurs operate informally. Upon formalization, they could obtain benefits such as better financing options or access to new markets that lead to higher income and growth opportunities. In addition, consolidating the economic autonomy of these women could increase the productivity of the country's economy.
Informality affects Mexico's competitiveness, since it tends to be related to lower productivity and lower wages for workers, in addition to limiting the ability of businesses to grow. It is one of the reasons why women entrepreneurs in the formal sector have average monthly incomes 2.5 times higher than those with a business in the informal sector (9,535 pesos and 3,707 pesos, respectively).
What are the characteristics of Mexican entrepreneurs?
The Mexican Institute for Competitiveness (IMCO) analyzed the sociodemographic characteristics of Mexican entrepreneurs -considering employers and independent workers-, as well as the main barriers that prevent them from making the leap to formality and consolidating their business.
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Based on data from the National Survey of Occupation and Employment (ENOE) of the Inegi, the IMCO found that an average Mexican entrepreneur is between 25 and 44 years old, is married, has one or two children, earns 3,707 pesos per month , studied up to secondary school and operates informally.
In the absence of more flexible jobs, entrepreneurship has been an option for women to generate an income without abandoning their activities at home. This has become more evident for the 4.6 million women who are self-employed. However, most of those who take advantage of this opportunity do so informally.
What stops women entrepreneurs from formalizing?
According to the interviewees for the study, as well as a literature review, the IMCO identified five barriers:
One way to improve the economic conditions of women entrepreneurs is to break down barriers to facilitate the formalization of their businesses, in order to achieve higher income, as well as promote more productive economic activities. For this, the IMCO Proposes: