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This paper provides novel evidence that female U.S. House Representatives causally increase the U.S. government’s demand for products and services provided by female entrepreneurs. Using detailed data on individual contracts between the U.S. federal government and private firms around close U.S. congressional elections, we report that the election of a female representative increases the probability of government contracts being awarded to female entrepreneurs by 3.0 to 6.8 percentage points. Furthermore, contract performance is either improved or unaffected, which speaks against the misallocation hypothesis. We find no support for role-model effects as changes in the pool of female entrepreneurs cannot explain our findings. Thus, the evidence suggests that female politicians improve the business environment for female entrepreneurs by reducing the gender bias in the U.S. government procurement contracting system. |
