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Why Women Earn Less Than Men in Self-Employment

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  • GREG HUNDLEY
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    Abstract

    Data from a sample of 659 self-employed individuals are used to evaluate explanations for the large earnings differential between self-employed men and women. A significant portion of the differential is attributed to differences in the industrial distribution of businesses and to the differential effects of housework and family responsibilites on the earnings of males and females. Differences due to industry position are traced to the lower proportions of women in the relatively rewarding areas of construction and professional practice and their greater representation in the relatively unrewarding personal services sector. Women in self-employment appear to be burdened by housework and childrearing in ways that limit the scope of their self-employed businesses and the intensity of work effort in them. If self-employed women were to have their total hours of labor redistributed between market work and house work in the same manner as men, their self-employed earnings would be substantially increased. A portion of the differential is traceable to differences in financial capital (female-run business have smaller capital stocks) and differences in specific human capital (female self-employed have less experience in running their business).

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    Bibliographic Info

    Article provided by Transaction Publishers in its journal Journal of Labor Research.

    Volume (Year): 22 (2001)
    Issue (Month): 4 (October)
    Pages: 817-829

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    Handle: RePEc:tra:jlabre:v:22:y:2001:i:4:p:817-829

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    Web page: http://transactionpub.metapress.com/link.asp?target=journal&id=110581

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    Cited by:
    1. Thomas Leoni & Martin Falk, 2010. "Gender and field of study as determinants of self-employment," Small Business Economics, Springer, vol. 34(2), pages 167-185, February.
    2. Sabarwal, Shwetlena & Terrell, Katherine, 2008. "Does gender matter for firm performance ? evidence from Eastern Europe and Central Asia," Policy Research Working Paper Series 4705, The World Bank.
    3. Werner, Arndt & Moog, Petra, 2009. "Why do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms," MPRA Paper 18826, University Library of Munich, Germany.
    4. Julie Zissimopoulos & Lynn A. Karoly, 2003. "Transitions to Self-Employment at Older Ages: The Role of Wealth, Health, Health Insurance, and Other Factors," Working Papers 135, RAND Corporation Publications Department.
    5. Parker, Simon C., 2008. "Entrepreneurship among married couples in the United States: A simultaneous probit approach," Labour Economics, Elsevier, vol. 15(3), pages 459-481, June.
    6. Robert Fairlie & Alicia Robb, 2009. "Gender differences in business performance: evidence from the Characteristics of Business Owners survey," Small Business Economics, Springer, vol. 33(4), pages 375-395, December.
    7. Amelia Biehl & Tami Gurley-Calvez & Brian Hill, 2014. "Self-employment of older Americans: do recessions matter?," Small Business Economics, Springer, vol. 42(2), pages 297-309, February.
    8. Daniel Lechmann & Claus Schnabel, 2012. "Why is there a gender earnings gap in self-employment? A decomposition analysis with German data," IZA Journal of European Labor Studies, Springer, vol. 1(1), pages 1-25, December.
    9. Yannis Georgellis & Howard Wall, 2005. "Gender differences in self-employment," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(3), pages 321-342.
    10. Hiroyuki Okamuro & Kenta Ikeuchi, 2012. "Work-Life Balance and Gender Differences in Self-Employment Income during the Start-up Stage in Japan," Global COE Hi-Stat Discussion Paper Series gd12-260, Institute of Economic Research, Hitotsubashi University.
    11. Parker, Simon C., 2013. "Do serial entrepreneurs run successively better-performing businesses?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 652-666.
    12. Marc Cowling & Mark Taylor & Peter Mitchell, 2004. "Job Creators," Manchester School, University of Manchester, vol. 72(5), pages 601-617, 09.
    13. Gema Álvarez & Carlos Gradín & Mª Soledad Otero, 2013. "Self-Employment: Transition And Earnings Differential," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 21(2), pages 61-90, Autumn.
    14. Nada Kobeissi, 2010. "Gender factors and female entrepreneurship: International evidence and policy implications," Journal of International Entrepreneurship, Springer, vol. 8(1), pages 1-35, March.
    15. Elena Bardasi & Shwetlena Sabarwal & Katherine Terrell, 2011. "How do female entrepreneurs perform? Evidence from three developing regions," Small Business Economics, Springer, vol. 37(4), pages 417-441, November.
    16. Andersson Joona, Pernilla & Wadensjö, Eskil, 2008. "A Gender Perspective on Self-Employment Entry and Performance as Self-Employed," IZA Discussion Papers 3581, Institute for the Study of Labor (IZA).
    17. Simoes, Nadia & Moreira, Sandrina B. & Crespo, Nuno, 2013. "Individual Determinants of Self-Employment Entry – What Do We Really Know?," MPRA Paper 48403, University Library of Munich, Germany.

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