Determinants of Women's Entry into Self–Employment

Objective. Building on recent studies that have shown how employment– and family–related characteristics are uniquely intertwined in facilitating women's decisions to work for themselves, I examine the process of transitions into self–employment among white, African–American, and Hispanic women. Methods. This study analyzes data from the National Longitudinal Survey of Youth, a national probability sample of those born between 1957 and 1964, which allows me to apply a dynamic model for studying women's employment transitions. Results. Regardless of race or ethnicity, factors such as work experience and the presence of a spouse encourage women to become self–employed. At the same time, the distributions of these characteristics for African–American women, and to a lesser extent Latinas as well, significantly account for their slower entry into self–employment. The effect of children on women's entry into self–employment, which earlier studies often found to be positive, especially among whites, is mixed. Conclusions. These findings reveal significant racial/ethnic differences in the process of female self–employment and also call into question the view that self–employment allows working mothers to better combine their careers with family responsibilities than does wage/salary sector employment.