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Friendship at Work: Can Peer Effects Catalyze Female Entrepreneurship? (WP-15-22)

Erica Field, Seema Jayachandran, Rohini Pande, and Natalia Rigol

Does the lack of peers contribute to the observed gender gap in entrepreneurial success, and is the constraint stronger for women facing more restrictive social norms? The researchers offered two days of business counseling to a random sample of customers of India’s largest women’s bank. A random subsample was invited to attend with a friend. The intervention had a significant immediate impact on participants’ business activity, but only if they were trained in the presence of a friend. Four months later, those trained with a friend were more likely to have taken out business loans, were less likely to be housewives, and reported increased business activity and higher household income. The positive impacts of training with a friend were stronger among women from religious or caste groups with social norms that restrict female mobility.

Erica Field, Professor of Economics and Global Health, Duke University

Seema Jayachandran, Associate Professor of Economics and IPR Associate, Northwestern University

Rohini Pande, Mohammed Kamal Professor of Public Policy, Kennedy School of Government, Harvard University

Natalia Rigol, PhD Candidate in Economics, Massachusetts Institute of Technology

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