Do Job Preferences Add to the Explanation of the Gender Earnings Gap in Self-Employment? The Case of St. Croix County, Wisconsin

This study uses data collected on self-employed women and men in a single county to analyze the influence of job preferences on the gender-based earnings gap. Data reduction, carried out on the pooled sample, reduces eleven job preference measures selected for the study to five: challenge of competition, make a lot of money, job security, close to extended family, and can be innovative. A separate regression for self-employed women indicates make a lot of money has a positive and close to extended family a negative effect on earnings. For self-employed men, results indicate positive effects on earnings for challenge of competition and make a lot of money. Sensitivity results indicate, in estimates for self-employed women, the positive effect of make a lot of money is not robust. At the same time, the sensitivity analysis indicates a positive effect of preference for financial risk-taker on the earnings of self-employed women. A Oaxaca decomposition using pooled, female, and male coefficients indicates the stronger preference of self-employed men in the sample towards make a lot of money explains at least 6.37 percent of the earnings gap.