Unpaid Care Work Quietly Erodes Profits for Chile’s Women Micro-Entrepreneurs

In Chile, nearly two million people run micro-enterprises, the tiny businesses that dominate Latin America’s economic landscape. Yet a striking gender divide runs through this entrepreneurial ecosystem: while 59.3 percent of Chilean micro-entrepreneurs are men, women make up 41.7 percent, and the financial outcomes for women are dramatically worse. According to the country’s Seventh Micro-Entrepreneurship Survey, 70.4 percent of women entrepreneurs earn incomes at or below the minimum wage, compared with just 40.5 percent of men. A new econometric study published in Heliyon by Nelson Lay-Raby, Hanns de la Fuente-Mella, and Gonzalo Ríos-Vásquez of Pontificia Universidad Católica de Valparaíso now offers one of the most detailed statistical portraits yet of why this gap persists, and the answer points squarely at the invisible hours women spend caring for homes and families.

The research team drew on the 2022 Micro-Entrepreneurship Survey, a nationally representative instrument developed jointly by Chile’s National Institute of Statistics and the Ministry of Economy, Development, and Tourism. The survey targets owners of economic units employing fewer than ten workers and uses a sophisticated sampling framework built on the 2017 National Population and Housing Census, with geographic stratification designed to capture the spatial distribution of labor market activity across the country. From an initial pool of roughly 3,021 women entrepreneurs surveyed, the researchers constructed an analytical sample of 842 women who reported using part of their business earnings for household consumption and reported positive income, yielding a dataset well suited to studying the intersection of entrepreneurship and economic dependency.

Methodologically, the study is notable for how rigorously it handles the survey’s complex design. Rather than treating the 842 observations as independent draws, the authors incorporated stratification, clustering, and unequal selection probabilities into their regression models. Survey weights, related to the inverse of each unit’s inclusion probability, allowed sample observations to represent the broader population of Chilean women micro-entrepreneurs, while a design-based sandwich estimator produced standard errors that account for correlation among observations within the same primary sampling unit. The researchers modeled two outcomes separately: the logarithm of annual net business profit and the logarithm of gross annual entrepreneurial income. Explanatory variables included weekly hours devoted to the business, monthly expenditure on merchandise and supplies, daily hours of unpaid domestic and caregiving work, age, education, business location, region, and reported income changes during the COVID-19 pandemic. Model adequacy was verified through residual diagnostics, generalized variance inflation factors, and design-adjusted Wald tests, all of which indicated no serious violations of the statistical assumptions.

The headline finding is a negative association between unpaid work and gross entrepreneurial income. Each additional daily hour devoted to unpaid domestic and caregiving activities was associated with roughly 3.9 percent lower gross income, a result statistically significant at the ten percent level. Interestingly, the same association did not reach significance for net profit, suggesting that unpaid responsibilities may constrain women’s capacity to generate revenue, through reduced customer contact, shorter production time, and interrupted business continuity, more than they affect the income remaining after expenses. The authors interpret this through the lens of Gendered Institutions Theory, which holds that social institutions are not gender-neutral but systematically assign caregiving and domestic production to women, shaping economic outcomes long before any individual business decision is made.

By contrast, the variables that measured direct business engagement showed strong, consistent positive associations with both income measures. Each additional weekly hour dedicated to the micro-enterprise was linked to approximately 1.7 percent higher net income and 2.4 percent higher gross income. A one percent increase in expenditure on merchandise and supplies was associated with a 0.23 percent rise in net income and a 0.31 percent rise in gross income. These coefficients, the authors caution, represent conditional associations rather than causal effects; profitable businesses may also demand more hours and inputs, creating a potentially bidirectional relationship. Still, the pattern underscores that time and productive investment are the currencies of micro-enterprise success, precisely the resources that unpaid care work depletes.

Education emerged as another powerful correlate. Compared with women who had not completed basic education, those with basic education showed gross income roughly 75 percent higher, while secondary and technical education were associated with increases of about 74 and 78 percent respectively, and university education with a smaller but still notable advantage. The educational gradient likely operates through financial literacy, managerial capacity, opportunity recognition, and access to formal networks, although the authors warn that education may also proxy for unobserved advantages such as family background and accumulated assets. Age told a subtler story: women aged 25 to 34 earned significantly higher net income than those aged 65 or older, while the 45 to 54 group showed marginally higher gross income, but most age coefficients were not significant once business and socioeconomic characteristics were accounted for.

Where a business operates mattered considerably. Women running their ventures from premises outside the home earned about 88 percent higher net income and 81 percent higher gross income than those selling at customers’ premises, and street-based vendors also showed substantially higher net income. The authors suggest that a dedicated commercial location facilitates customer access, visibility, regular hours, and a clearer separation between productive and domestic spheres. Conversely, home-based businesses may suffer from space constraints and constant interruptions from household duties, a pattern that resonates with the finding on unpaid work and illustrates how women’s businesses are often adapted around caregiving obligations rather than organized around market opportunity.

The study also documented stark territorial and pandemic-related disparities. Relative to businesses in northern Chile, net income was significantly lower in every other macro-region, with adjusted differences ranging from about 26 percent in the central zone to 46 percent in the north-central regions. For gross income, the penalties concentrated in the Metropolitan and Southern regions. Businesses whose owners reported income declines during the COVID-19 pandemic earned roughly 33 percent less in net terms and 43 percent less in gross terms than those reporting increases, consistent with evidence that small and informal firms across Latin America lacked the financial reserves and digital capacity to weather the crisis. Notably, neither being a secondary household provider nor founding a business in response to the pandemic showed a significant association with income, leading the authors to argue that economic dependency is too multidimensional, involving control over resources, income stability, and decision-making power, to be captured by a single binary indicator.

The policy implications are far-reaching. The authors argue that conventional entrepreneurship training and microcredit, while valuable, will remain insufficient if women continue to shoulder a disproportionate share of unpaid care. They point to complementary measures such as affordable childcare, support for caring for dependent family members, redistribution of unpaid labor within households, and access to dedicated business premises. Evidence from the region supports this integrated approach: experimental programs in Chile combining financing with support have raised entrepreneurial profits and business continuity, while training and technical assistance for women entrepreneurs in Peru produced growth rates exceeding 15 percent two years after implementation. Because the study is cross-sectional and observational, its coefficients describe associations rather than proven causes, and the authors call for longitudinal data incorporating household finances, caregiving arrangements, business formality, and access to credit. But the core message is difficult to ignore: in Chile’s micro-enterprise economy, the gender profit gap is not simply a story of ambition or skill. It is a story of hours, who spends them building a business, and who spends them, invisibly and uncompensated, holding a household together.

Subject of Research: Econometric analysis of how unpaid domestic work, education, business location, and regional factors relate to income among women micro-entrepreneurs in Chile

Article Title: Econometric analysis of the micro-entrepreneurship, gender and economic dependency in Chile

Article References: Lay-Raby, N., de la Fuente-Mella, H., & Ríos-Vásquez, G. (2026). Econometric analysis of the micro-entrepreneurship, gender and economic dependency in Chile. Heliyon, 12(15), Article e45570. https://doi.org/10.1016/j.heliyon.2026.e45570

Image Credits: AI Generated

DOI: 10.1016/j.heliyon.2026.e45570

Keywords: micro-entrepreneurship, Chile, gender inequality, unpaid work, caregiving, economic dependency, survey-weighted regression, women entrepreneurs, informal economy, COVID-19, Latin America, Heliyon