Chapter 5 in "The Economics of Gender in Mexico," presents a study analyzed male-female differences in earnings in rural and urban microenterprises in Mexico. Data were gathered from surveys of 1,944 households in 54 rural communities and 11,461 microenterprise owners in 34 urban areas. Findings indicate that female-headed microenterprises in urban areas earned about 50 percent of what male-headed microenterprises earned. In rural areas, that figure was about 36 percent. Differences in employment preferences, employer discriminatory behavior, and household constraints induced women into self-employment. Because household responsibilities generally had predetermined schedules, women's microenterprises were more likely to be home-based and have a lower growth rate and earnings. Female entrepreneurs aimed to complement family income; therefore they were more interested in a steady income than in high-risk, high-return activities. About 25 percent of female rural entrepreneurs had not completed any formal education compared to 11 percent of male rural entrepreneurs. About 11 percent of female urban entrepreneurs did not have formal schooling compared to 7 percent of male urban entrepreneurs. Public policy recommendations are offered for reducing unequal gender distribution of productive characteristics, including provision of broad-based formal and informal education and training programs for women, and for eliminating differential growth constraints that influence returns to productive and personal characteristics. (Contains 29 references.) (TD)