factors that many more female-owned firms report to be obstacles than male-owned firms are having to care for small children and having to fulfill other family obligations and household chores. These could thus be important reasons for why female-owned firms tend to be smaller and less profitable than male-owned firms. The following section investigates whether there is indeed a relationship between child care obligations and characteristics and performance of female-owned firms.

# **4.c. Child Care Responsibilities and Household Chores**

This section uses the 2002 Mexican ENAMIN data to examine whether child care obligations are correlated with smaller size and lower performance of female-owned firms. The sample of micro firm owners surveyed in the ENAMIN is drawn from a larger sample of individuals surveyed in the Mexican labor market survey (ENE). The ENE includes information on all household members. By linking the ENAMIN to the ENE, I can thus calculate whether a firm owner lives in a household where children are present. The data show that 56 percent of firm owners live in a household that has at least one child under the age of 12.

Table 7 displays the results of regressing different firm characteristics on a dummy variable for female firm ownership, a dummy variable for having children under the age of 12 in the household, and the interaction of the two. The regressions also control for age, education, and marital status, as well as region dummies to avoid any bias in the results due to these factors. The coefficient on the female dummy represents the difference in the outcome variables across female-owned and male-owned firms in households where there are no children under the age of 12 present. The sum of the coefficient on the female dummy and on the interaction term represents the difference in outcome variables across female-owned and male-owned firms in households with children under the age of 12.

The results for employees as the outcome variable show that female-owned firms have 5.3 percent fewer employees than male-owned firms in households where there are no children under the age of 12. In households, where there are children under the age of 12, this difference increases to 8.7 percent. Similarly, the difference in machinery value across female- and maleowned firms is also greater in households with children under the age of 12. For sales, the pattern is again similar, although the difference between female- and male-owned firms in households with children under the age of 12 is not statistically significant. With respect to profits, I examine the difference in average and in median profits. The difference in average profits does not vary with the presence of children under 12. However, the difference in median profits across femaleand male-owned firms is 2.5 percentage points higher in households with children under 12 (up from 4.4 percent).

The evidence in Table 7 suggests that the difference in size and performance of female- and male-owned firms is 30 to 40 percent larger when children under 12 are present in the household. A possible interpretation of this finding is that women need to care for these children at the same 18