Financing constraints and female share of employment: evidence from China

This paper constructs a theoretical model where brain skills and capital are complementary, and female workers have a comparative advantage in brain-intensive occupations compared with brawn-intensive occupations. Financing constraints reduce the capital intensity and the demand for brain-intensive occupations, thus reducing the demand for female workers. Using data of manufacturing firms in China from 2004 to 2007, this paper finds that financing constraints reduce the female share of employment in firms. This effect is greater in industries with higher external finance dependence.