Gender, Entrepreneurship, and the Formal-Informal Dilemma: Evidence from Indonesia

This study analyzes the preferences of entrepreneurs about formality and focuses on the role of gender. Relying on original data collected in Indonesia, we unpack the differences between various types of female entrepreneurs (currently in the informal sector) according to their preferences about formalization. Contrary to the existing literature, we find that female entrepreneurs possess highly nuanced preferences about formalization that are conditional on many factors. The preference for formalization is strongest among female entrepreneurs who are older, married, rural-based, and have recently started their firms. Our work contributes to research that seeks to better understand entrepreneurial preferences and the role that gender plays.