Women-owned businesses are 24% more likely to be forced into liquidation during bankruptcy than male-owned ones, but primarily when judges are overworked.
March 31, 2026
Original Paper
When She Fails: Women Entrepreneurs and Gender Gaps in Business Bankruptcy
SSRN · 6475198
The Takeaway
The study found that while men and women have similar credit quality before filing, 'busy' judges default to harsher outcomes for women as a cognitive shortcut. This suggests that the survival of a small business depends less on its financial health and more on the specific workload of the judge assigned to the case.
From the abstract
Female-owned firms are more likely to be pushed into liquidation and less likely to emerge successfully from bankruptcy than observably similar male-owned firms, and the gap widens sharply when courts are congested. In our data on U.S. small-business bankruptcies, female-owned firms are 24 percent more likely to file under Chapter 7 and, conditional on Chapter 11, are considerably less likely to receive a discharge. Evidence from 1.9 million SBA loan records shows little difference in observable